One way to use your tractor?

[2manyrocks]

New story here raising the question whether he'll bulldoze his business,too. Home razer might take business next | cincinnati.com | Cincinnati.Com

I have no clue whether this bank got any of the TARP money or not. I think the question is what did he owe the bank and what's going to happen now that he bulldozed their collateral?

What's next? Does the bank get a restraining order and throw him off the business premises to keep it from being bulldozed, too?

 

[JB4310]

New story here raising the question whether he'll bulldoze his business,too. Home razer might take business next | cincinnati.com | Cincinnati.Com

I have no clue whether this bank got any of the TARP money or not. I think the question is what did he owe the bank and what's going to happen now that he bulldozed their collateral?

What's next? Does the bank get a restraining order and throw him off the business premises to keep it from being bulldozed, too?

Well he's sure getting alot of attention, read the comments after the storey and am surprised that most of them agree with most of the comments on this thread.

I'm still getting the David vs Goliath feeling from this storey and for now I cautiously applaud him. Must of took some nads, it was a gorgeous property, his actions were definitely NOT the easy way out IMO.

Seems they wouldn't let him separate his house collateral from the total package, by his willing to pay that part off?
I know we can't change the rules after we sign something, but let's not defend the banks outright. There is such a thing as "predatory lending practices" it's a fact, mostly applies to the less informed, but we know the lenders are capable of some pretty sleazy tactics.

With all this fame, there's a good possibility he's already making money on this and will possibly be able to make good on his debts. So I doubt the bank would want him arrested, locked up etc. How's the saying go about, even bad publicity is good? he'll probably be on Oprah and Letterman.

JB.

 

[MossRoad]

In my opinion, that's a load of bologna. A business man put his house up for collateral, took a gamble, and lost. People applauding him for poor business decisions, and now possibly criminal actions just never ceases to amaze me.

I made cautious financial decisions all of my life. So did my wife. Her parents, my parents, my siblings, her siblings, most of our friends(but not all) also made cautious financial decisions. This guy appears to be a jerk. A jerk with a bulldozer. I feel no sympathy for him and hope he goes to jail. This kind of stuff just raises the expense of doing business for the rest of us.

 

[dave1949]

In my opinion, that's a load of bologna. A business man put his house up for collateral, took a gamble, and lost. People applauding him for poor business decisions, and now possibly criminal actions just never ceases to amaze me.

I made cautious financial decisions all of my life. So did my wife. Her parents, my parents, my siblings, her siblings, most of our friends(but not all) also made cautious financial decisions. This guy appears to be a jerk. A jerk with a bulldozer. I feel no sympathy for him and hope he goes to jail. This kind of stuff just raises the expense of doing business for the rest of us.

We all end up paying for whatever the bank loses on his loans.

Just an informal question - Would you use your home as collateral for a business loan?

One of my brothers did that, he used to have a home. No dozers involved, just couldn't keep the business afloat and ended up in bankruptcy. I can understand believing in your dream, but is that a risk a person should take?
Dave.

 

[Cat_Driver]

Read tha part where he was going to pay off the 160K and the bank REFUSED saying Nah we can get more my selling it"

Yes the bank was 100% correct and not breaking the law by following the contract to the letter and demanding to repossess the house, and YES the guy was 100% correct in doing what ever he felt like to his own house.

So we have two people acting like jerks.

Desperate people do desperate things. I think the most dangerous people are the ones that have nothing to lose. Like those guys in prison with two life sentences or on death row. They will stab a guard for no reason because like they say, you can't kill me twice.

With all this economy stuff going on, more and more people are coming unglued, like the guy that just flew into the IRS building.

 

[2manyrocks]

Generally speaking, banks take homes as collateral for business loans because they are trying to make sure they get their money back. Business loans that are collateralized solely by accounts receivable and inventory seem to go bad because some business owners will sell off their inventory, use up their cash, and then there's nothing for the bank. If the bank takes the home as collateral, then it helps collaterize the business loan except in this case where the home got bulldozed.

I personally would not use my house as collateral for a business loan.

I would go further and say that there is too much lending and borrowing going on. Being financially overextended is risky, stressful, bad for the borrower, bad for the lender, and bad for the overall economy. IMHO.

But I'd say to stay tuned to this particular story because it's not over yet.

 

[MossRoad]

Just an informal question - Would you use your home as collateral for a business loan?

Maybe. We have a home equity loan that we use for larger purchases, like used cars, tractors and vacations. However, we have enough in reserve to pay it off if things go south. The only reason we have the home equity loan is because we get a huge homestead credit and mortgage exemption on our property taxes. The interest we pay on the home equity loan is always less than the amount we would have to pay on the property taxes if we didn't have the exemption. Kinda screwy, but we save $500-$1000 dollars a year by having a loan against the house with a zero balance.

 

[MossRoad]

Read tha part where he was going to pay off the 160K and the bank REFUSED saying Nah we can get more my selling it"

They were quoting him, not the bank.

If I owed you $500,000 dollars and offered to pay you only $160,000 would you accept my offer and write off the remaining $340,000? I don't think so.

 

[MossRoad]

...
I would go further and say that there is too much lending and borrowing going on. Being financially overextended is risky, stressful, bad for the borrower, bad for the lender, and bad for the overall economy. IMHO.
...

I think I agree with you 100% on that. We tend to pay as we go. Save up for something, then buy it, rather than buying something on credit hoping our projected income meets expectations.

The only time we did buy on credit was our house. It was 20K. We borrowed 18K with 2K cash down payment. It was appraised at 25K. So as soon as we bought it we were in the black on the books because we had total assets worth 25K, total debts of 18K leaving a net worth of 7K. We both had jobs and were making about 15K each, so 30K of income annually with a debt of 18K meant we were likely able to pay it off real quick in a pinch. Even if we both lost our jobs we could have gotten minimum wage jobs and payed off our debts over 30 years. So, we had a roof over our heads.... a small roof, but a dry roof that we could afford.

 

[dave1949]

Maybe. We have a home equity loan that we use for larger purchases, like used cars, tractors and vacations. However, we have enough in reserve to pay it off if things go south. The only reason we have the home equity loan is because we get a huge homestead credit and mortgage exemption on our property taxes. The interest we pay on the home equity loan is always less than the amount we would have to pay on the property taxes if we didn't have the exemption. Kinda screwy, but we save $500-$1000 dollars a year by having a loan against the house with a zero balance.

Homestead credits - we have those for the house you occupy as owner. Never heard of mortgage exemption on property taxes. I know Indiana used to be quite a bit different on local taxes, such as personal property tax.

Maine law permits local assessments on personal (non-real estate) property, no town does it to my knowledge. Thank goodness. That would cause an uproar.

I didn't feel good about my brother using his home as business collateral when he did it. He partnered with another guy in a custom/job shop machine/plastic molding shop about 6 years ago. Really bad timing and I don't think he was really looking at it realistically enough since those shops aren't always easy to make a go of unless you have the right circumstances. They were too auto manufacturing dependent and couldn't get into other lines despite trying hard and bidding a lot of stuff.
Dave.