RV Loan Restrictions for Fulltimers

The friendliest place on the web for anyone with an RV or an interest in RVing!
If you have answers, please help by responding to the unanswered posts.

ZuniJayne

Well-known member
Joined
Mar 5, 2005
Posts
334
Location
near Albuquerque, NM
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.
 
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.
 
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.
 
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.
 
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
 
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!!
 
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?
 
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
 
From the article...
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.
 
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
 
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?
 
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...
 
Molaker said:
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.
 
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.
 
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.
 
Ned said:
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
"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.
 
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
 
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.
 
Back
Top Bottom