It used to be just rich guys with stupid pants who bought expensive boats and yachts. However, during those glorious pre-recession days almost anyone was able to take out a loan and buy a boat.
Borrowers are defaulting on those loans now and it means lots of business for the world’s repo men.
A New York Times article, appearing in tomorrow’s issue, profiles the world of Jeff Henderson, the owner of Harrison Marine, who is hired by the banks to repossess boats from delinquent borrowers. According to the article:
Henderson is repossessing nearly a boat a day, most from the Great Lakes area but a few farther afield. He is looking for a man from the Bronx named Rocko, who told the bank his 34-foot cruiser was at a marina that does not exist. He is trying to get a Michigan woman to tell him where to find her husbandÃ¢â‚¬â„¢s pontoon boat.
Surprisingly, the terms of a typical boat loan allow the bank to employ someone to enter a borrower’s property and extract the indebted boat without fear of trespassing charges.
Henderson doesn’t like doing it, but on a few occasions he has crept around someone’s backyard to remove a boat. Most of the time the boats to be repossessed are kept at a local marina where they are delinquent in dock fees. After Henderson pays those fees, the dock owners are more than happy to send him on his way with the boat.
He recalls a few time having a gun pulled on him. Once an old woman came out to defend her boat with an old hunting rifle aimed right at Henderson. On another occasion a police officer confronted Henderson with his pistol and asked why he was stealing his boat.
That is some scary stuff. Not a line of business most people would want to be involved in, I’m guessing. Henderson has a heart of stone now and after a lifetime of being forced to listen to weepy sob stories about late payments, he doesn’t give the owners a chance to reason with him.
This article was interesting because it also offered some good insight into the plight of the consumer and some of the reasons behind the recession and credit crunch.
One of the former boat owners that Henderson is repossessing explains that he simply spent beyond his means. He’ll soon declare bankruptcy and also had his apartment foreclosed on. After taking out a $125,000 loan to pay for his boat, he spent 7 years barely making the interest payments. The loan is currently worth twice as much as the boat.
At some point you’ve gotta ask yourself, was this all worth it? Being able to say you have some boat in a marina that you never use, while you waste away in bankruptcy proceedings? In some ways aren’t these guys just as responsible for the recession as all those Bear Stearns executives?
New York Times: Times Are Tough, Except In The Repo Business, May 20, 2008