It’s real easy to hear someone talk about what they would do if their lender had the legal right to foreclose on their boat, and an entirely other matter to have that property foreclosed on in real life. We can talk all we want, but the facts are that there are many companies that don’t care what will happen to the boat once they decide to penalize you for late payment or no payments.
With a boat, it’s a little different. Depending on the size of the vessel, a lender may decide to simply help you out in your situation. In fact, we’ve found that over the past three months, more lenders are willing to lend a hand with your issues, than to turn you over to a collection agency. A collection agency on a boat foreclosure is simply someone working on behalf of the lender because the lender isn’t really set up to spend the kind of time necessary in getting the past due monies collected. So they send it to a collection firm.
Larger boats might go back to the lender. Defaulting on these kinds of loans is similar to defaulting on a home loan. It’s a large loan and there are ramifications to not paying the money back in a timely fashion. First, the bank or lender, in a boat foreclosure, will probably get the boat in their possession. How this makes sense, instead of working with a firm that at least can keep the vessel in good order – is beyond the scope of this website. The fact is many boat foreclosures end up with a boat not being able to be salvaged at a price that the lender can really break even.
With boats, you’ll find that they auction off the vessel and then use that money to pay down the loan. This makes little sense because most of the time the original lender is just months away from making good on a payment. They boat is sold, money received and placed toward the debt, and what happens is everyone loses. The reason why lenders can’t see this disconnect in the system – their system – is because they are so removed from it.
We tried to get several boat foreclosure experts to comment on this action and none were available for comment. Just goes to show you that they are happy with what is going on as long as it pays down some of the loan. Why they won’t work with the borrower in the first place is beyond comprehension. Yes, many have their chance to work with the lender and mess that up – but there is a large percentage that would like to but can’t because lenders are too complicated to work with. They have rules that can’t be bent, and terms that they say they cannot change.
The disconnect is where the employee at the lending facility does not take charge and create an environment where boat foreclosures don’t have to happen, one where they can work with any case, come back and re-address cases until they come up with a solution.
Care to comment?
