EPDM Coatings
Desert Valley RV Park
RV LED Bulbs offer Sponsored by Spotless Water Systems rvupgradestore.com Composet Products EVDO

Author Topic: RV Loan Restrictions for Fulltimers  (Read 6670 times)

ZuniJayne

  • ---
  • Posts: 334
RV Loan Restrictions for Fulltimers
« on: October 25, 2010, 10:27:31 AM »
Greetings, gang!

This may have been posted, but I just ran across it.  It seems that between parts of the new credit act, and parts of an older law, some fulltimers are having problems getting loans for their RVs.  It appears that several major lenders have opted out of RV loaning because of some complications. 

You can read the full article here:

http://www.rvdailyreport.com/News/tabid/56/ctl/ArticleView/mid/370/articleId/8576/New-federal-regulations-to-limit-loans-to-full-time-RVers.aspx

IMHO, it looks like a great excuse for RV dealers to steer you to THEIR, more profitable (for them) financing.
-- Jayne and Hero
    -- Trying to sell the 2001 Arctic Fox 26X travel trailer and the 50cc Zuma scooter. Now working on a 1973 Four Winds pickup camper for my 1993 Ford F250 pickup so I can tow the 1988 Dodge Raider 4WD too!
        - Settled near Albuquerque, NM for a while..

Paul & Ann

  • ---
  • Posts: 775
    • Paul and Ann's Great RV Adventure
Re: RV Loan Restrictions for Fulltimers
« Reply #1 on: October 25, 2010, 12:15:38 PM »
I found the comments to be most interesting.

Paul

SargeW

  • Forum Staff
  • ---
  • *
  • Posts: 3773
  • Life is good in Fallbrook!
Re: RV Loan Restrictions for Fulltimers
« Reply #2 on: October 25, 2010, 03:13:59 PM »
From what I get out of the article, NO ONE will be able to finance a full time RVer. And it appears that this is all about being able to TAX RVers that live in their RV's . At the end of the day, it's the consumer that gets screwed, once again.
2013 Phaeton 36GH
Visit our new travel blog! http://www.mytripjournal.com/rvnchick2014
Support your local Police Officer, Fire Fighter and Military!

seilerbird

  • Guest
Re: RV Loan Restrictions for Fulltimers
« Reply #3 on: October 25, 2010, 04:02:59 PM »
This is not a political forum.
« Last Edit: October 25, 2010, 05:49:09 PM by Wendy »

Carl L

  • Forum Staff
  • ---
  • *
  • Posts: 7239
Re: RV Loan Restrictions for Fulltimers
« Reply #4 on: October 25, 2010, 04:17:16 PM »
Good point Tom.   This is indeed an RV forum.  We have a vitally interesting topic for full timers and anyone who would finance RVs.   Let's keep on topic folks and not drift into partisan politics.
Carl L/LA   [Forum Staff]  KI6SEZ

Prowler 23LV TT pulled by a '95 Ford Bronco

mphy98

  • ---
  • Posts: 243
Re: RV Loan Restrictions for Fulltimers
« Reply #5 on: October 25, 2010, 05:03:38 PM »
This has nothing to do with politics and everything to do with financing.  If you live in it full time, it is considered a home, not an RV. Then you have to go through forclosure rather than repo.  I have dealt with this in the past and still do with park models that we finance.  You cannot live full time and get a loan.
« Last Edit: October 25, 2010, 05:08:18 PM by mphy98 »

Paul & Ann

  • ---
  • Posts: 775
    • Paul and Ann's Great RV Adventure
Re: RV Loan Restrictions for Fulltimers
« Reply #6 on: October 25, 2010, 05:08:23 PM »
This article shouldnt be taken all that seriously.  I am sure the facts are not as the writer states.

At first in the article he states that the change is because of the 2010 Financial Reform Bill.  Then he states the problem arises from a law was passed in 2003, but became effective in 2010.

Another problem with the article is that the author used second hand information from an RV dealer, instead of contacting banks to see if they had stopped or were going to stop making RV loans to fulltimers, and if so why.  Poor reporting at the least.

Paul
« Last Edit: October 25, 2010, 06:01:02 PM by Lou Schneider »

afchap

  • ---
  • Posts: 873
    • The Empty Nest
Re: RV Loan Restrictions for Fulltimers
« Reply #7 on: October 25, 2010, 05:33:43 PM »
Quote
great excuse for RV dealers to steer you to THEIR, more profitable (for them) financing
  We used dealer procured financing when we bought our coach back in 2003 ...I don't know about how "profitable" it was to the dealer but it was/is great for us!!  Just because it is dealer procured financing doesn't mean it is bad.  Most of what I have read recently on RV financing indicates it has tightened up considerably, but like any other financing if the buyer can and does put around 20% down up front they will have no problem getting financing. If you are unable to put 20% down, you probably cannot afford the house, RV, or whatever ... ESPECIALLY if it is something an RV that is depreciating every day!!
Paul ... (KE5LXU), was fulltimin', now parttimin'...
'03 Winnebago Ultimate Advantage 40e
'00 Honda Odyssey toad
Escapees, FMCA, SMART, WIT
http://www.pjrider.com

scottydl

  • Admin assist
  • ---
  • *
  • Posts: 4917
  • Central IL
Re: RV Loan Restrictions for Fulltimers
« Reply #8 on: October 25, 2010, 05:52:09 PM »
The article has merit to the RV community here, so I don't think it's necessarily appropriate to immediately lock further discussion... as long as everyone can keep their political opinions quiet, please.  Nothing good can come from that.

Neither the OP (nor us RV Forum staff) have any control over the editorial comments below the linked article, but if we stick with discussing the content of the story then everything should be okay.

Any fulltimers out there with non-political opinions?
Scott, wife, 3 boys... and the dog
1994 Thor Residency 3500 owned 2007-2012
Now looking for the next perfect RV...

Wendy

  • Forum Staff
  • ---
  • *
  • Posts: 12206
Re: RV Loan Restrictions for Fulltimers
« Reply #9 on: October 25, 2010, 05:54:36 PM »
This is an interesting article and there is room for discussion but there's no need to make it political. I've made some adjustments to certain messages and hope that the thread can continue in a harmonious manner.
 
Wendy
Wendy, Mike, and Gordon
~We can't be lost because we don't care where we're going~
Here's where we are http://map.datastormusers.com/user2.cfm?user=2276
2004 Winnebago Sightseer
1973 Sunshine Yellow VW Bug

Gary RV Roamer

  • Forum Staff
  • ---
  • *
  • Posts: 43315
  • We're on the road again...
Re: RV Loan Restrictions for Fulltimers
« Reply #10 on: October 25, 2010, 06:03:44 PM »
From the article...
Quote
Since full-time RVers don't have a "permanent residence," the banks may   have difficulty determining what taxes to withhold an in what amount.
  Although a vehicle may be licensed in a particular state, various   counties and even cities within those counties have different property   tax rates. Without an actual location upon which to base the tax, banks   won't be able to escrow the payments, and would thus be in violation of   the law, said Rishel.

I find it odd that the financial guy says that banks may find it hard to figure out what the taxes are on the RV to escrow. But the state and local governments that tax these things don't seem to have any trouble figuring it out. Does that mean that government is smarted than private industry? Besides, this is no different than mortgage bankers have been dealing with for decades. They get an estimate of taxes for the address of record (the coach registration address in this case) and pro-rate that over 12 monthly payments.  An extra nuisance, perhaps, but not exactly rocket science.

Besides, many (most?) states don't have any personal property tax on vehicles and fulltimers seldom choose to live in one that does.  Insurance, though, is still subject to escrow withholding.
« Last Edit: October 25, 2010, 06:07:01 PM by Gary RV Roamer »
Gary
--------------
Gary Brinck
2004 American Tradition
2007 GMC Acadia
Homebase: Ocala National Forest, FL

Paul & Ann

  • ---
  • Posts: 775
    • Paul and Ann's Great RV Adventure
Re: RV Loan Restrictions for Fulltimers
« Reply #11 on: October 25, 2010, 06:06:06 PM »
Wendy, thanks for getting this thread back on track.

I would think that we can all agree that there are lots of people in the world who dont understand fulltiming, and I am sure most of the fulltimers have run into glitches before.  I certainly cant imagine anyone who would purposely make it impossible for a fulltimer to borrow money for an RV.

Paul

Molaker

  • ---
  • Posts: 4663
    • WanderLust
Re: RV Loan Restrictions for Fulltimers
« Reply #12 on: October 25, 2010, 06:12:11 PM »
I'm not a fulltimer, so I don't quite understand this.  If you are a fulltimer, where are you registered to vote - typically?  Wouldn't that be considered your permanent residence and, therefore, the appropriate taxing local?  Or are most fulltimers (cringe) not registered vote?
Tom & Joyce and Ditto the "don't tell her she's a dog" Westie
U.S. Navy (Ret)
2014 Winnebago ERA 24' class B

skyking4ar2

  • Forum Staff
  • ---
  • *
  • Posts: 2920
  • I don't know what I don't know so I look here...
Re: RV Loan Restrictions for Fulltimers
« Reply #13 on: October 25, 2010, 06:12:21 PM »
I would be curious to know the number for outstanding loans on RV's to full timers at this point in time. In the grand scheme of things, I doubt the lending is on par with other retail credit, car loans, and some other forms of lending. Said another way, it might be a tempest in a teapot.

With all the ruckus in both the mortgage loan business and commercial bank business, I think they are going to have their hands full with day-to-day compliance in the course of their normal business operations, and RV's are not going to be a primary target.

I do think RV loans, like all loans, are going to come under some serious credit worthiness scrutiny, and no doubt, credit has tightened up, as it responded to market pressures.

We are full time, we have a new loan with Bank of the West, and nobody has made any overtures to me about any serious changes. That does not mean they won't.

I will be watchful about what happens, but I am not going into panic mode over it.

Buyers with marginal credit in all forms of lending are out of the market, anyway, right now. It's not about politics, anyway; it's about the money...
Kim & Christi Bertram
SKP 106183
FMCA 420913
----------------------------------
2012 Thor Damon Tuscany 42RQ
2014 Jeep Grand Cherokee Diesel
Trailer Ranch RV Park, Santa Fe, NM

Ned

  • Forum Staff
  • ---
  • *
  • Posts: 23564
  • Ned and Lorna are former full time RVers
    • Have you seen Rolling Stock?
Re: RV Loan Restrictions for Fulltimers
« Reply #14 on: October 25, 2010, 06:21:59 PM »
I'm not a fulltimer, so I don't quite understand this.  If you are a fulltimer, where are you registered to vote - typically?  Wouldn't that be considered your permanent residence and, therefore, the appropriate taxing local?  Or are most fulltimers (cringe) not registered vote?

Fulltimers register to vote in the state and county where they are domiciled.  We received our vote by mail ballots in today's mail and will be voting this week.

Every fulltimer needs to choose a domicile or the states will choose it for you, and not to your advantage.  We've had numerous discussions of this topic in the past and have articles in our library that address the domicile issue.

As for dealer financing, when we bought our truck the dealer was able to get a better rate and longer term than our prearranged loan with our bank.  The dealer does make a profit on the financing but if it gets the buyer a better deal and a better rate, then everyone wins.
-- Ned -- Fulltimer 1997-2013
1997 Holiday Rambler Endeavor LE
2007 GMC Canyon

Want to know what we're doing? http://blog.usabyrv.us

Lou Schneider

  • Forum Staff
  • ---
  • *
  • Posts: 4827
Re: RV Loan Restrictions for Fulltimers
« Reply #15 on: October 25, 2010, 06:24:03 PM »
Quote
I would be curious to know the number for outstanding loans on RV's to   full timers at this point in time. In the grand scheme of things, I   doubt the lending is on par with other retail credit, car loans, and   some other forms of lending. Said another way, it might be a tempest in a   teapot.

It is a tempest in a teapot, unless you're one of the individuals caught in the tempest.

I think the relatively low number of fulltimer RV loans is the crux of the problem.  With everything else on their plate why should banks even worry about how to comply with these new regulations if loans to fulltimers only comprise 0.0001% of their loan volume?

So they take the easy way out and stop making the loans if there's any possible question about residency or intent.

The net effect is banks will be disinclined to make loans to fulltimers or anyone else outside the normal mold.  This means loans will not be available unless someone else decides the unserved market segment is profitable enough to justify jumping through the regulatory hoops.
« Last Edit: October 25, 2010, 06:28:54 PM by Lou Schneider »

skyking4ar2

  • Forum Staff
  • ---
  • *
  • Posts: 2920
  • I don't know what I don't know so I look here...
Re: RV Loan Restrictions for Fulltimers
« Reply #16 on: October 25, 2010, 06:31:24 PM »
Lou, Looks like we are the tea! Maybe...

Market forces usually will right the ship, there's just always a lot of collateral damage, but I have seen in it in the computer business, the car business, and the airplane business over the years. The money gravitates to where it can do the most with the least amount of headache, aka compliance.

People will find a way to get what they want with their money and credit. It's just not going to be like going to Sonic and ordering a Blast.

Banking is not democratic, i.e everybody does not get a loan.
Kim & Christi Bertram
SKP 106183
FMCA 420913
----------------------------------
2012 Thor Damon Tuscany 42RQ
2014 Jeep Grand Cherokee Diesel
Trailer Ranch RV Park, Santa Fe, NM

Molaker

  • ---
  • Posts: 4663
    • WanderLust
Re: RV Loan Restrictions for Fulltimers
« Reply #17 on: October 25, 2010, 06:35:11 PM »
Fulltimers register to vote in the state and county where they are domiciled.  We received our vote by mail ballots in today's mail and will be voting this week.

Every fulltimer needs to choose a domicile or the states will choose it for you, and not to your advantage.  We've had numerous discussions of this topic in the past and have articles in our library that address the domicile issue.

That's pretty much what I assumed, which poses another question.  In the article I quote
Quote
"The new lending laws imposed by Regulation Z Section 226.35 requires banks to escrow property taxes and insurance on any RV or boat that is the borrower's primary residence. Since full-time RVers don't have a "permanent residence," the banks may have difficulty determining what taxes to withhold an in what amount."

How can it be said fulltimers don't have a "permanent address" if they are registered to vote?  Banks are in business to make loans and I don't see how this new reg. will get in their way, unless the full story is not being told.  I'm thinking this article was intended to throw a fright and not necessarily to inform.
Tom & Joyce and Ditto the "don't tell her she's a dog" Westie
U.S. Navy (Ret)
2014 Winnebago ERA 24' class B

Wendy

  • Forum Staff
  • ---
  • *
  • Posts: 12206
Re: RV Loan Restrictions for Fulltimers
« Reply #18 on: October 25, 2010, 06:40:43 PM »
Calculating taxes and insurance in the borrowers' state of domicile, paying the taxes and insurance when due. I can see banks saying "screw it, it's too much trouble, we're just not going to make RV loans to full-timers." Now if you have a long-term relationship with a bank, you may not have a problem.
 
Wendy
Wendy, Mike, and Gordon
~We can't be lost because we don't care where we're going~
Here's where we are http://map.datastormusers.com/user2.cfm?user=2276
2004 Winnebago Sightseer
1973 Sunshine Yellow VW Bug

SargeW

  • Forum Staff
  • ---
  • *
  • Posts: 3773
  • Life is good in Fallbrook!
Re: RV Loan Restrictions for Fulltimers
« Reply #19 on: October 25, 2010, 06:44:48 PM »
I am proof that the story has merit. I went through the wringer when I purchased our new RV a few months back.  In spite of an 800 credit score and putting over half down, several banks refused to finance me because I am a full timer.  And many of the banks listed in the article were contacted by my RV dealer. It's fact folks. The part I am concerned with is the pending "property taxes" that may or will be levied.  The rest of it has already happened.
2013 Phaeton 36GH
Visit our new travel blog! http://www.mytripjournal.com/rvnchick2014
Support your local Police Officer, Fire Fighter and Military!

Ned

  • Forum Staff
  • ---
  • *
  • Posts: 23564
  • Ned and Lorna are former full time RVers
    • Have you seen Rolling Stock?
Re: RV Loan Restrictions for Fulltimers
« Reply #20 on: October 25, 2010, 06:47:26 PM »
Quote
How can it be said fulltimers don't have a "permanent address" if they are registered to vote?

The article said "permanent residence", not "permanent address".  Fulltimers have a permanent address (or most do) but not a permanent residence.  There is a big difference.
-- Ned -- Fulltimer 1997-2013
1997 Holiday Rambler Endeavor LE
2007 GMC Canyon

Want to know what we're doing? http://blog.usabyrv.us

Lou Schneider

  • Forum Staff
  • ---
  • *
  • Posts: 4827
Re: RV Loan Restrictions for Fulltimers
« Reply #21 on: October 25, 2010, 06:48:34 PM »
The problem is this creates two classes of RV loans.  Fulltime use is now handled differently than part time use.  If you are NOT a fulltimer, nothing changes.   The banks only have to escrow the first year's insurance and property taxes on RVs if they are being used as a primary residence, i.e. fulltime.  If the RV is only used part-time, it's not the primary residence and nothing changes from current practices.

My guess is there isn't enough volume to justify changing the procedures to accommodate the relatively few numbers of loans taken out by fulltimers, so loans to fulltimers will disappear unless someone else steps into the market.
« Last Edit: October 25, 2010, 07:02:45 PM by Lou Schneider »

Wendy

  • Forum Staff
  • ---
  • *
  • Posts: 12206
Re: RV Loan Restrictions for Fulltimers
« Reply #22 on: October 25, 2010, 06:53:11 PM »
An option full-timers have is to use a relative or friend's address as their permanent address. Hopefully, they have a friend or relative who lives in an RV-friendly state. Using South Dakota or Livingston addresses is probably a give-away that you're a full-timer.
 
I would also argue that if you stay in one place repeatedly for 6 months, as many full-timers do, then you have a permanent residence.
Wendy, Mike, and Gordon
~We can't be lost because we don't care where we're going~
Here's where we are http://map.datastormusers.com/user2.cfm?user=2276
2004 Winnebago Sightseer
1973 Sunshine Yellow VW Bug

Lou Schneider

  • Forum Staff
  • ---
  • *
  • Posts: 4827
Re: RV Loan Restrictions for Fulltimers
« Reply #23 on: October 25, 2010, 07:00:31 PM »
Staying in one place doesn't negate the RV being used as the principle residence, Wendy.  The requirement to escrow the insurance and property taxes remain - the only advantage is there will be less ambiguity about the amount to be escrowed and where it should be sent.

You'll still have two classes of RV loans - fulltime with the escrow requirement, part-time without.
« Last Edit: October 25, 2010, 07:07:17 PM by Lou Schneider »

tswms

  • ---
  • Posts: 508
Re: RV Loan Restrictions for Fulltimers
« Reply #24 on: October 25, 2010, 07:26:12 PM »
One problem I cam see is that the state laws that applie at the time the loan is originated may not be the same as the time of default of the loan.  A MH bought in FL may be in WA when the buyer defaults, and may pose much different  problems when the lender is forced to repossess. It is one of the same problems Insurance have faced for years.
Tony
90 Newmar Kontry Star
07 Saturn Ion
Siloam Springs AR (NW)

Jeff

  • Forum Staff
  • ---
  • *
  • Posts: 8330
Re: RV Loan Restrictions for Fulltimers
« Reply #25 on: October 25, 2010, 09:33:39 PM »
Most of us know of RVs repo'd for less than 1/2 the loan value in the pas few years. I know of several loan apps for RVs that had ridiculous terms offered because the banks really didn't want the paper. A lot of the drop in RV values was caused when banks dropped the hammer on dealers and forced sales in a down market without providing the dealer with a floor plan to handle trades.

Jumping on any loan they think could cause a problem probably got full timing in their sights. The dealers will have to negotiate for a source for their customers if they want to tap the relatively high end full timing market.

ceemike

  • ---
  • Posts: 559
Re: RV Loan Restrictions for Fulltimers
« Reply #26 on: October 25, 2010, 10:41:44 PM »
I've never heard of property taxes on an RV whether or not it's for full time use.  Are there states that treat RVs as real estate?
Mike & Judy Wagner
From the Keystone State
FMCA F418448
2004 Winnebago Brave 32V, W20 Chassis
2004 Honda CRV
2004 Honda Reflex

tswms

  • ---
  • Posts: 508
Re: RV Loan Restrictions for Fulltimers
« Reply #27 on: October 25, 2010, 10:49:57 PM »
In Arkansas all vehicles are subject to personal property tax including motorhomes.
To gert a license you must show proof of insurance and tax paid.
Tony
90 Newmar Kontry Star
07 Saturn Ion
Siloam Springs AR (NW)

Phil

  • ---
  • Posts: 979
Re: RV Loan Restrictions for Fulltimers
« Reply #28 on: October 25, 2010, 11:59:08 PM »
I've never heard of property taxes on an RV whether or not it's for full time use.  Are there states that treat RVs as real estate?

Property tax on RV's in Utah. :(

scottydl

  • Admin assist
  • ---
  • *
  • Posts: 4917
  • Central IL
Re: RV Loan Restrictions for Fulltimers
« Reply #29 on: October 26, 2010, 05:19:06 AM »
^^ Same with Missouri.  It's a trend I'm betting all states will try to adopt eventually.
Scott, wife, 3 boys... and the dog
1994 Thor Residency 3500 owned 2007-2012
Now looking for the next perfect RV...