Underwater loan

[starduster67]

I'm really red faced to even ask but if anyone has any ideas I'd be happy to hear. Like many seniors we bought a new Class A when retiring. Things were good back in 2001and we were full timing. Put a large down pmt although it never seemed that way. Illness struck we haven't used it in three years . Still paying big mortgage on it and have another 8 yrs to go. Hate to see it languishing in storage lot and with ins and storage fees too. I have been trying to figure a way out of this.No dealers can help we are $50 thou. Under water. I don't have that much in savings to pay it off. We've always PD our debts and repo scares the heck out of us. Anybody been in this spot or knows anyone who found a solution? Want to get a small one eventually that I could handle I admit I'm afraid of the big one. I'd appreciate any ideas and please no sarcasm I know I'm in a stupid situation of my own doing just asking for any input. Believe me 2 dealers actually told us in different wording let them take it back but I'm sure that would be a nightmare. We over paid but we signed and are responsible. Thanks hope someone will reply.

[starduster67]

OK folks everything that could be said has been said. Thanks

[bigdogger]

starduster67 wrote:
That's correct you must own it out right to be able to sell.

No you don't. You just need to be able to pay it off when you sell it. That can be by using your savings or by borrowing the difference. All your current lender and the new buyer care about is being able to get a clear title. The lender will release the title to the new buyer once the loan is paid in full. People sell things they owe money on (cars, boats, homes, RVs, etc) all the time. Are you really sure you are actually $50,000 upside down? What do you owe and what do you think it will sell for? Don't just add up your payments to get the payoff, call the bank because it is a lot less than the sum of the payments. Also, don't just take the first number off someone's head for the value of your rig. If you can get $5K more for the rig than the first quote and the payoff is $5k less, you are starting to close the gap and making it much more palatable to take the loss and sell.
As for the deal that got you here, it was not necessarily a bad deal. Rigs go down in value and the financial crisis really tagged the value of high end older RVs since they can't easily be financed any more. You could not have foreseen that coming and you really don't know how much of this negative equity is actually a carryover from your trade in. Same with interest rates, if you got 8% in 2001, that was a great deal, today it's a ripoff rate. Things change. Just because it is turning out bad doesn't make it was a bad deal to start with.

[bigdogger]

northmeck0255 wrote:


http://money.cnn.com/2005/09/14/news/fortune500/delta/

Corporations file bankruptcy and "reorganize" all the time, stiffing their creditors in the process.

Because they cannot meet their obligations, not out of convenience. BIG DIFFERENCE

[Gale_Hawkins]

Starduster67 these cases are so common it is not funny but at least you do not have your head buried in the sand.

I still think you need to talk about your options with a qualified advisor. Eight years is a long time when retired and with health problems in the house making for a lot of unknowns.

For the MH to be saleable in 8 years you are going to have to spend a lot of money to keep it in saleable shape over that time. You have got to figure out a way to sell in sooner than later and just focus on paying off a loan to cover the upside down part. $96,000 to payoff with uncertain health has to be one heck of a stress. Total to insure, store and maintain could be another $24K. If it has been parked without service for three years already then batteries and others things may be doing secondary damage.

Yes I understand the current owner of your note could care less perhaps since it is a performing note per the bank inspectors. Compounding a bad financial decision is the last thing any of us need to do but it is so easy to do.

Start showing up in person and asking any source you can think of that might could help. You have a wasting asset that is not only dropping in value but is costing you cash as well. When it is gone and you have a plan to pay off the upside down part you can better focus on family health.

Be proactive and I bet within 30 days you will hit upon a workable plan to more peace of mind and pocket book. You are on the right track but we are not there to help you act.

[time2roll]

starduster67 wrote:
That's correct you must own it out right to be able to sell.

Not exactly. You just need the ability to pay off the loan.

If sale price does not cover the loan then you only need to come up with the deficiency balance. If you don't have the cash you can borrow the deficiency balance which will be lower and easier to pay than the existing RV loan.

Lower balance, lower interest of the new loan mean more goes to principal and the pay off comes sooner for selling now.

[northmeck0255]

Corporations file bankruptcy and "reorganize" all the time, stiffing their creditors in the process.

[monkey44]

dennislanier wrote:
Maybe I'm wrong, but I think in order to sell the MH to someone else and give them a clear title, she has to pay THE FULL AMOUNT SHE OWES RIGHT NOW. She cannot sell something she does not own - the only way she can own it is to pay off the entire balance immediately.

Correct, that's what I meant. Sell it, THEN take out a equity loan and pay the balance the day it sells. One transaction, otherwise, the bank won't release the title. Will take some coordination with the financing people, that's all.

Otherwise, OP is paying on a LARGE loan, instead of a small loan. IF OP is not using the RV, then it makes a difference in the amount of payment and the amount of interest paid.

[starduster67]

I've just caught up on recent replies. Thank you for your thoughts and well wishes. We will pay because we can afford it the only thing is if my hubby predeceases me I won't have that extra thousand dollar pmt on my own. In that case I would have no choice to let whatever happens happen. I am going to try the extra principal option seems the best to me. I would say I hope if my situation gives someone else pause before they fall for a dealers trap of 20 yr loan even if they feel tip top and raring to go think about it. In 2001 we retired we were healthy for our age we had a little extra money after home sale. Had a perfectly good Yellowstone Country Club RV but we had slide problems and after many attempts at repair they still existed 4 yr s later. We
stopped at a dealer in SC and were so grateful he was willing to take it in trade. Oh were we muddled we got so robbed on this deal it wasn't funny. Long story short we over paid big time we were really dumb. Anyway here we are we survived we admit we weren't very smart about a lot of things. Live and learn

[Community Alumni]

I guess it is different in the US as compared with here in Canada. I have had vehicle loans whereby I've sold the vehicle and paid off the bank. We do not have separate titles as such (not in Quebec anyway), the vehicle registration serves as your ownership paper/title.

[starduster67]

That's correct you must own it out right to be able to sell.

[bigdogger]

northmeck0255 wrote:

bigdogger wrote:

timmac wrote:


Also don't feel bad about giving it back to the bank, that's the risk they take and they know this.

No!!! Actually, that is not a risk they take. They came to the bank to borrow money to buy an RV and they agreed to pay it back. The credit risk the bank took was if the customer somehow became UNABLE to pay it back or the bank makes a bad credit decision based on the customer's character.
Just not wanting to pay it back is not a legitimate reason to default. We would seek a judgment and pursue repayment of every penny plus any and all fees if we found a customer who decided not to pay only out of convenience. It is totally unfair to our stockholders, our depositors, and our other loan clients to allow people to just not pay because they don't want to. People who allow foreclosures and repossessions when they have the ability to pay only because they suddenly don't like the decision they made of their own free will are nothing but deadbeats. Thankfully this person realizes their obligations and have indicated they have no desire to do anything like that. I agree with some of the other posters that they should look into borrowing the difference between the sale price and the amount owed. It appears they have a reasonably valuable rig, so even if they only get half of the loan balance, it is easier to pay $50,000 than it is to pay $100,000 when they are getting no value from having the rig.

Corporations do this all the time. Are they also "deadbeats"????

A corporation that did that would absolutely be a deadbeat. However, please cite an example of where a corporation that has the ability to pay just doesn't. Corporations make bad decisions all the time, and they lose copious amounts of money on them. But they don't go around stiffing the people that loaned them the money. When companies default on loans it is because they don't have the money to pay. It is a really big deal for a corporation to default on their obligations, so they don't unless they are broke.
There is a big difference between defaulting because you cannot pay and defaulting because you don't want to pay. The first is legitimate and unavoidable. The second is just being a deadbeat.

[beemerphile1]

I commend you for being conscientious and paying your bills. As I see it you have two options.

As described above, take out a personal loan for the amount of negative equity and sell the RV. You will then save the storage, insurance, and other costs so your expenses might actually be lower.

Option two I would not recommend but it is possible. If you buy a smaller RV and roll the negative equity into it you can also accomplish your goal. Problem is that you still owe the same amount and now have a smaller RV that you soon won't use either. I don't know you but from the information given, it sounds like your RVing days are over. Rolling the debt into a smaller RV ultimately puts you in a worse position down the road a year or so.

[northmeck0255]

bigdogger wrote:

timmac wrote:


Also don't feel bad about giving it back to the bank, that's the risk they take and they know this.

No!!! Actually, that is not a risk they take. They came to the bank to borrow money to buy an RV and they agreed to pay it back. The credit risk the bank took was if the customer somehow became UNABLE to pay it back or the bank makes a bad credit decision based on the customer's character.
Just not wanting to pay it back is not a legitimate reason to default. We would seek a judgment and pursue repayment of every penny plus any and all fees if we found a customer who decided not to pay only out of convenience. It is totally unfair to our stockholders, our depositors, and our other loan clients to allow people to just not pay because they don't want to. People who allow foreclosures and repossessions when they have the ability to pay only because they suddenly don't like the decision they made of their own free will are nothing but deadbeats. Thankfully this person realizes their obligations and have indicated they have no desire to do anything like that. I agree with some of the other posters that they should look into borrowing the difference between the sale price and the amount owed. It appears they have a reasonably valuable rig, so even if they only get half of the loan balance, it is easier to pay $50,000 than it is to pay $100,000 when they are getting no value from having the rig.

Corporations do this all the time. Are they also "deadbeats"????

[Gale_Hawkins]

Good points. No healing can start until the MH is GONE.