It maybe costing them too much. Often there is not a big enough loan amount on the boat that can absorb all their costs.

It's also one of the first things that people stop paying on when times are tough.

C'mon SB, how much real cost is there to a bank when they loan money? A few bucks for a credit report, a few hundred in employee time to review the loan docs and prepare the paperwork. That should be it.

Perhaps the real reason is they don't want to loan out large amounts of money right now when rates are low, then have the rates go up.

Or maybe it's because their cost to borrow money to loan have gone up quite a bit since the money situation has tightened considerably. Maybe this bailout will help free up some money for them to loan and they'll get back into it.

I don't see qualified buyers being turned away...that's where the banks' bread and butter is.

Other than knowing how much to lend or the boat's true worth, the cost is not so much on the front end.

Not different than commercial lending, mortgage lending, auto lease finance and bank to bank lending there is a severe liquidty problem in the entire finance system.

There is money laying in waiting, but the system is locking up due to an unwillingness to make the loans. The Zero Down - low interest rate days are over, and this is going the slow down everything accros the economy.

Yes banks need to lend out money to survive, but they formost must get the money paid back 1st. At the moment, the banks themselves are worried about survival by the day. Looks like Wachovia will be the next to fall.

Ben Franklin: " I worry more about the return OF my money, than the return ON my money "

Lets see, Back buys there money for 2-3% Loans it back to you for 7-8% , Poor bankers, can't manage to make any money at that rate !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The banks are reluctant to loan on anything that is not an essential when money is tight. Even those with good jobs can be hurt in times like this. When individual money gets tight, they get rid of anything that is recreational, and if it uses fuel, it goes fast. Lake homes, boats, RVs, and ATVs are bad investments for the next few years, to the banks. To them, they not only have a higher chance that the borrower will default on those items, they will have an almost impossible job of selling them and getting their money back. Don't forget that many of them have really long term notes on existing boat loans that have lost almost all value in this market.

The credit report fee and "loan origination fee" or "loan preparation fee" or whatever they call it which are paid by the borrower covers the bank's up front costs.

The problem is that money market funds broke or are near breaking the buck, which means that there is no money to lend as the banks don't even trust each other! This occured most recently with Reserve Management's Money Market Fund and when 90 Day T-bills went to 30 bps or even less on September 17. When banks won't lend to each other its tough luck for J6P who wants a loan on a boat.

Yep, the banks have limited funds to lend right now. Certain types of loans have priority over other types. Recreational boats loans must be further down the list of priorities.

Banks are getting hit with some higher repo fees and higher costs to resale, both in broker's fees and in its holding costs.

If you repo a $10,000 car, I guess a bank runs it through an auction.

Not the way a repo'd boat is typically re-sold.

The first choice would be to go back to the selling dealer.

But if the selling dealer does not have any interest in the repo, then it is usually sent to the local auto auction for disposal.

The lending institutions would prefer that the boat dealer buy it from them at a reduced price (from the loan amount) versus sending it to the aution. The auctions can be brutal.

Some banks will let a boat sit on a dealers lot until it is sold, but as mentioned, they want their money NOW.