There’s a built in demand and reliable pipeline for selling regular single-family homes, before they incur maintenance needs, and they will (usually) sell even faster if you are willing to drop the price a little. But sales of $80M yachts are probably fewer and slower.
Hopefully if someone ends up buying Trump’s yacht at auction someday the first thing they do is change all the mattresses. (Note to mods: not meant to be a political jab, just toilet humor.)
That’s subject to state law and varies by state. (It’s referred to as “recourse” or “non-recourse”.)
Oh man, that right there tells you how toxic the Trump brand has become. Pretty much everywhere else, real estate prices have been going up by quite a lot. Here in Canada, it wouldn’t be hyperbole to say they’ve skyrocketed in the past year. Selling for 50% of what you paid is almost unheard of these days.
I wonder if the bank wasn’t always expecting to pay the insurance bill. I mean, I own a house, and part of our monthly payment includes money to pay for insurance. The lender holds onto that money, and pays the bill each year. Ditto with property taxes.
As I understand it, if that policy lapsed for whatever reason (I cancelled it, the insurer decided I was a bad risk, or whatever), the bank has the right to provide coverage from an insurer of their choice, to cover THEIR risk only, and likely not at an especially favorable rate. If this happens, and the house burns down, the bank gets their money but I’m SOL as far as our equity.
For our car, we are required to have insurance since we have a loan on it - though there’s no escrow in that situation. I suspect that if they receive notice of an insurance lapse, it would work much like with the house. And presumably if I did not continue to make the payment (including the loan, and the jacked-up insurance rate), they’d repo the car.
Would the loan on a mega-yacht work like a house loan (insurance part of payment), or a car loan (no escrow)?
In either case, if I keep making the payments (which have increased, due to the insurance), the bank has no interest in repossessing the asset. If Trump is still making his boat payments, the bank won’t repossess it, unless the original loan contained wording allowing them to do so in this scenario.
This is not universally true, it varies with lender and with loan/value ratio, credit rating, etc. I pay my own property taxes and homeowners insurance directly. That was after refi; previous lender did escrow tax and insurance.
Good point. I’d heard of people being able to opt out of escrowing taxes and insurance, but have never bothered - I’d rather be sure I have the money sequestered.
If the yacht’s loan does not require escrow, I have to assume the loan has wording requiring the owner to maintain appropriate insurance, or the lender can implement something. The lender may have made the decision to pay the insurance and add the cost onto the monthly payment, in this situation. If Trump doesn’t make the higher payment, then the bank could foreclose.
I did some googling, and it looks like the yacht story was decades ago. It doesn’t say whatever became of the yacht.
I knew of a fellow who had a nice expensive new truck - he wrote it off because of a DUI where he crashed it into a tree in front of the local police station. Because of DUI, the insurance did not cover the vehicle. Story goes he was paying 5 years of payments on a truck that no longer existed… and his wife made him walk to work (about 3 miles) rather than chauffeur him.
A guy who used to work for me bought a car that subsequently turned out to be stolen.
The first he knew about it was when the cops knocked on his door. The car went back to the legal owner and my driver was left with paying off a car loan on a car he no longer had.
The thief went to prison and had no assets so a civil action would have been a waste of money and effort.
That’s odd. The usual common law rule is that a bona fide purchaser for value gets good title. Did the police just re-possess the car?
I want to know what kind of bank gives a loan on a car without a clear title.
I’m pretty sure that’s an equitable principle only relevant to competing equitable interests.
As the original owner has full title not just an equitable interest, and as the thief can pass no title at all, BFP’s can’t get title that competes with the original owner.
This would be unusual in ship finance in all jurisdictions with which I’m familiar.
Also bear in mind that Trump’s borrowings are quite likely to be far more interwoven than that of someone who takes out an ordinary car or house loan. Likely Trump’s borrowings would be at least somewhat consolidated, and his lenders would hold security over a variety of assets.
I think he took out a personal loan. The car wasn’t security.
the first time when my mom went into the hospital that was 75 miles away she neglected to let me know her car insurance needed to be paid and since it was paid through a broker that dealt with several brands it was through a place I never heard of (one of those high-risk type places that advertised during the local stations 3 hours of jerry springer) they sent a “notice of suspension” which went to the dealer who did his own financing and to us … and the dealer sent a letter saying we needed to pay up or he was going to collect the car
I called the broker who tried to get an extension but they didn’t care they wanted the money then I called the dealer who before we moved was my brothers best friend’s dad and he understood I then called the broker back and we switched to what would become part of progressive and they paid the other place off
No I think it’s broader than that. From that esteemed legal authority, Wikipedia:
It’s an exception to nemo dat. A person who doesn’t have ownership can pass good title.
What I find additionally about BFP from Wikipedia says:
As such, an owner publicly recording their own interests (which in some types of property must be on a court-recognised Register) protects himself or herself from losing those to an indirect buyer, such as a qualifying buyer from a thief, who qualifies as a BFP.
Which suggests that since almost everywhere, a vehicle must be registered including VIN, that the original owner retains legal title. I assume buying a car and sticking it in your garage without registering it does not properly convey title, then? (Additionally, the question arises “why was it not registered?” which could imply suspicion it was not good faith.)
In practical terms, the buyer should have received the necessary papers from the seller to register the vehicle. Presumably the seller had some excuse for lack of papers, buyer did register fairly soon, and this flagged the vehicle?
Never underestimate the ability of a fraudster to generate paperwork.
True, but it takes a certain level of smart to generate proper paperwork and then sell to someone who can identify you - and not consider that the moment they in good faith register the car, they enter the VIN into the system, the truth will out.