Is it really getting this bad?

Dean

Dean

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Dean
I received a letter to day from my bank that I have done business with for over 8 years. (Locally owned) The letter out lined their new loan policies and what they are NOT going to finance. Guess what was on the list, you got it, AIRPLANES:hairraise:
Not only are they not going to do airplane loans, but the have axed boats and motorcycles as well. They say all luxury items have been eliminated and they well readdress these items in the future.
 
My locally owned bank did the same thing. It was the first of many changes due to the bank being bought by an international bank. Is your bank merging or being bought?

Maybe your bank has a new agreement with another institution which would funnel those loans to the other.
 
Yet, they'll still give you an unsecured loan for 2x your yearly income. Go figure.
 
Richard said:
My locally owned bank did the same thing. It was the first of many changes due to the bank being bought by an international bank. Is your bank merging or being bought?

Maybe your bank has a new agreement with another institution which would funnel those loans to the other.
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No merger, just new management. My old loan officer, who was one of the VPs retired and the Bank President shortly there after. The new management has really tightened their purse strings and are only doing 80/20 loans and have put a cap on signature loans of$ 5K.
 
Is it really getting this bad?

I certainly think so.

A housing development I pass on my way to work each day had a sign out front offering single family homes "Proudly offered from the Low $200's".
Two months ago, I noticed they had spray painted over the "$200's" part of the sign. Two weeks ago I saw the guys putting up the new sign now offering those same houses from the "Low $160's". A 20% reduction in one chop! Same houses, new price. I guess the builders are just trying to avoid foreclosure now. Atlanta really, really has a sad real estate market right now. The lenders/builders went completely insane with liberal (ie. just plain stupid) lending/building practices. The market has been appreciating waay too fast to support itself. "Hey! When the balloon note comes, we'll refinance and keep on going!" NOT!

Get ready for the lending backlash.
 
Bear Stearnes is getting a bailout....too many subprime loans....

You're just seeing the fallout of past misjudgements in the banking industry.
 
Steve said:
Bear Stearnes is getting a bailout....too many subprime loans....

You're just seeing the fallout of past misjudgements in the banking industry.
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Ya mean the guys who said the government just needs to get out of the way and let free markets run? Those guys? :mad:
 
What is occurring now with regard to mortgage loans and banks is as inevitable as a rock falling down after being thrown in the air. What is frustrating is this ludicrous notion that federal money ought to go into bailing out banks and potentially-defaulting homeowners.

Why?

So those portions of the country which have not been nearly so overheated in market appreciation (like, say, where I live) can (again) subsidize the markets which were ridiculously overheated?

It's not a crisis.
 
alaskaflyer said:
http://tinyurl.com/2v4ppo
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Credit unions vs. Banks? Unfortunately, my credit union will not do airplane loans. :( Too bad, I really like 'em... But my flying club's bank is more than happy to do them, as well as another bank in town. Both are locally owned and operated.

Interestingly enough, my club's banker said that they're very happy to lend us a couple hundred G's for an airplane, but if someone came in wanting to buy a jet for a couple mil, they wouldn't do it. Very interesting.
 
Dean said:
I received a letter to day from my bank that I have done business with for over 8 years. (Locally owned) The letter out lined their new loan policies and what they are NOT going to finance. Guess what was on the list, you got it, AIRPLANES:hairraise:
Not only are they not going to do airplane loans, but the have axed boats and motorcycles as well. They say all luxury items have been eliminated and they well readdress these items in the future.
Click to expand...

Emphasis added. Well, there's the problem right there. They mistakenly think airplanes are luxury items. You need to show them the thread on "Why I love flying". Clearly, airplanes are necessities for maintaining the mental health of a segment of the population. Would they deny a loan to someone who needed health care?:yes:

Judy
 
Something else to ponder... when a bank makes a blanket declaration- in a letter to its customers, no less- that it is rejecting an entire category of business without regard for the underlying fundamentals of the business itself, it suggests they have deeper-seated problems.

Loans on "luxury" items (I'll leave the discussion of what constitutes a "luxury" item and whether their characterizations are even valid for someone else) are no more inherently risky than any other loans, provided the lender uses good lending practices, and underwrites the loan properly. Don't loan too much against a given asset, and don't loan to ill-qualified borrowers.

Now.

If a bank makes an internal decision not to make certain loans simply because they lack the expertise in-house to properly evaluate the risk, then that's a valid business decision, especially for a smaller bank. My business bank does not make aircraft loans, but they have not done so for about ten years, ever since they got burned on a loan secured by a Baron which (as it turned out) had a big honkin' mechanics' lien on file against it. As my officer says, "Nobody here knows the first thing about airplanes, and we got burned, so we send that business to another bank we know well."
 
flyingcheesehead said:
Credit unions vs. Banks? Unfortunately, my credit union will not do airplane loans. :( Too bad, I really like 'em... But my flying club's bank is more than happy to do them, as well as another bank in town. Both are locally owned and operated.

Interestingly enough, my club's banker said that they're very happy to lend us a couple hundred G's for an airplane, but if someone came in wanting to buy a jet for a couple mil, they wouldn't do it. Very interesting.
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Mine does, and it beat the rate from several other lenders.

I admit that a local bank will treat you right, and I was a member of one in little West Yellowstone, Montana years ago that treated me very well.

But at the end of the day their profits go into someone else's pockets and someone else's priorities whereas with a credit union instead of profits and fees there are better rates.
 
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