Barclays Marine Finance cash in on repossessions seller beware

[John100156]

The no doubt unwritten bit that is hard to prove but clearly exists - the Brokers brief.

Sell quick ensuring we get our money back and you get a fast sale for your reward. By the way you might like to approach.......

No regard whatsoever to the circumstances of their original customer.

Would it really have hurt them that much to wait and seek a better deal?

Oh yes, perhaps a good business move but you already have my thoughts on this.

I am an engineer with qualifications in engineering, not economics, but I find it hard to believe Barclays will not benefit in one way or another from tax payers money, even if invested in other banks!

 

[gjgm]

I cant agree with you. For one thing , we dont know how the borrower got from the loan, to the boat being sold.
The idea that a finance company has, or even should have, some moral or social responsibility to help someone who has failed on his loan agreement, seems a bit naive.
The fact that the possible sale price achievable is way below the original market price is hardly the fault or responsibility of the lender.
If the broker could achieve 95pct of the original price, you would be happy? The fact that he can only achive 70pct puts the lender at fault? If the market for this boat is that soft, then thats exactly the circumstances that the lender is going to want his money out fast.
Yes, for the borrower potentially to lose so much value in his boat is very tough, but he did borrow the money, and he did sign the agreement. His obligation is to make the monthly repayments. For whatever reasons, he isnt doing that. After all, if the borrower thought he could genuinely realise £20k more by waiting a few months, wouldnt he look to continue the loan repayment (somehow) for a while longer?
As I said, we dont know all the details here, but the crux seems to be that the borrower is dismayed to find his boat is only worth 70pct of what he paid for it, and feels Barclays and Inwards are to blame.

 

[MRC]

[ QUOTE ]
Spot on, Barclays didn't take the govt's money but some think it's only a matter of time until they do

[/ QUOTE ]


Barclays have just reported that they made £4,400,000,000 (£4.4 bio) for 2008, maybe they wont be going to teh UK for bailout money????

I bet there are a load of people with 100k+ cars purchased last year that would LOVE to see a £70k bid for them.

£70k bid for a £100k boat look respecatable to me.

 

[Deleted User YDKXO]

I happened to sit next to an investment banker at a dinner last Saturday night and he was adamant that he would not buy any shares in Barclays because he believes that, alone of the major high street banks, Barclays are the one bank who have not yet fully revalued their 'toxic' debt. This is because a) they have not yet taken money from the govt and have not been forced into a position to do so b) they don't want to precipitate a share collapse or, worse, a run on the bank c) they can't afford to take govt money because it might trigger a further share transfer to their Arab equity partners and d) the top management want to maintain their bonuses and need good P/L figures to do so
FWIW, my investment banker friend believes the latest Barclays figures are window dressing only. All hearsay and rumours of course so make of that what you want

 

[jhr]

[ QUOTE ]
Spot on, Barclays didn't take the govt's money but some think it's only a matter of time until they do

[/ QUOTE ] Well, they've just reported profits of (?) £6 Billion and their Directors have concluded that it would be inappropriate to award themselves bonuses this year, so I'm afraid they don't tick many of the boxes for Government intervention /forums/images/graemlins/grin.gif.

 

[Nick_H]

The market clearly agrees with you, that Barclays have avoided writing down worthless assets. At one point, Barclays shares were valued at 9 months earnings!

 

[John100156]

Well its good to have different perspectives. I do understand your argument(s) and accept them in the spirit they are given, but the top book value was 125k and he only received 70k!

None of us of course know all the facts, so perhaps I just felt sorry for the OP and vented off. I am not sorry for the banks though who are of course not naieve at all, just blundering idiots with an elevated opinion of themselves and no real regard whatsoever for their customers. Just hate the idea that my taxes may be supporting them.

I dont know what options are available to the government, its not my field of expertise, but what frightens me is that I now have no condidence whatsoever in them or the banks which leaves me and I expect many others feeling very uneasy!

 

[John100156]

Well if things are that good they deserve to be paid bonuses!

In my ignorance something does not quite add-up here........ Hard nose businessmen now with a conscience? /forums/images/graemlins/confused.gif

 

[gjgm]

the value of £125k was for the marque/boat.. not specifically this boat/year/model/engines.
He mentions a close deal a few months before, which suggests either he has been given some breathing time, or has independently tried to sell it. At some point, time runs out, and if we are in a fire sale situation, 30pct discount sounds far from abnormal. I'd guess many manufacturers would underwrite at that sort of figure at present.
i do feel sorry for the bloke. he obviously made sure he had some capital in the boat etc... but its hardly anyone elses fault...

 

[ari]

[ QUOTE ]
Well its good to have different perspectives. I do understand your argument(s) and accept them in the spirit they are given, but the top book value was 125k and he only received 70k!


[/ QUOTE ]

Who's book?

Sorry but people can potificate all they like about what something could be worth.

The cold blast of reality is that it is worth what you can get someone to actually pay for it.

The difference is (as I put in my original post) that Barclays position in trying to turn a depreciating asset that costs money to maintain into cash fast, a totally different position to happy owner wanting to upgrade at some stage, not too bothered when.

 

[John100156]

[ QUOTE ]
The cold blast of reality is that it is worth what you can get someone to actually pay for it.


[/ QUOTE ]

Mmmmm I seem to be in the minority!

I have heard this quoted many times and of course generally agree with it, but I suppose the question is: How hard did they really try to secure a better deal for their customer? We may never know. My gut feeling reading the OP is not too hard! /forums/images/graemlins/frown.gif

 

[jhr]

[ QUOTE ]
Well if things are that good they deserve to be paid bonuses!

In my ignorance something does not quite add-up here........ Hard nose businessmen now with a conscience?

[/ QUOTE ] ...or Hard-nosed Middle Eastern investors who want to avoid a PR disaster? I don't know, to be honest.

It's also possible that a 14% drop in profits and the cancellation of the current Dividend means that the Directors feel too embarrassed to accept a bonus payment. In which case, they have a conscience, unlike their colleagues in RBS /forums/images/graemlins/frown.gif.

 

[wakeup]

It is fairly clear what is going on here. I wouldl imgaine that the broker in question has an agreement with the finance company to take any of the boats from the finance company when ever asked the quid pro is the the broker only ever pays the outstanding debt on the boat. That way both parties are happy. If the owner of the boat couldn't keep up the payments you can understand that the finance company wouldn't have a great deal of interest in protecting the owners potential equity. The finance company will be happy that there is enough value left in the boat to cover the outstanding debt and a fast transaction via a partner broker ensures they aren't out of pocket long in terms of repayment interest.

All pretty harsh stuff but if I were the marine financier i probably would behave in the same manner and I probably would have a simillar agreement with a broker. The very tough lesson to learn here is that you shouldn't hand control of the asset back to the finance company if you ever want to get your equity back from it.

 

[Deleted User YDKXO]

[ QUOTE ]
How hard did they really try to secure a better deal for their customer?

[/ QUOTE ]

I don't understand what obligation you think Barclays might have that requires them to secure the best deal with their customer? They suddenly find themselves with a depreciating asset costing them money to store and money to sell whilst they're not earning any interest on the capital they have tied up in the asset. Their profit margin on something like a marine mortgage (interest rate charged to their customer less their cost of money less admin costs) is probably only 2-3% pa which is very quickly going to be swallowed up by the cost of repo'ing and selling the asset so they've got to sell the asset asap.
I agree with gjgm. There is no book value for boats and asking prices are no guide to actual selling prices. Barclays placed the boat with an experienced and active broker who got £70k in a depressed market. That's the value of the boat, not more

 

[capsco]

[ QUOTE ]
[ QUOTE ]
How hard did they really try to secure a better deal for their customer?

[/ QUOTE ]

I don't understand what obligation you think Barclays might have that requires them to secure the best deal with their customer? They suddenly find themselves with a depreciating asset costing them money to store and money to sell whilst they're not earning any interest on the capital they have tied up in the asset. Their profit margin on something like a marine mortgage (interest rate charged to their customer less their cost of money less admin costs) is probably only 2-3% pa which is very quickly going to be swallowed up by the cost of repo'ing and selling the asset so they've got to sell the asset asap.
I agree with gjgm. There is no book value for boats and asking prices are no guide to actual selling prices. Barclays placed the boat with an experienced and active broker who got £70k in a depressed market. That's the value of the boat, not more

[/ QUOTE ]



If I remember correctly, several years ago the law was changed to prevent the unfortunate customer, with potentially lots of equity in his boat, been ripped off by having his boat sold for "only" the outstanding ammount of the loan, the broker would then sell it to his "friend", the profit was then split between them.
I am sure this can still happen, certainly in the current market, as the finance company can not be expected to wait forever for a"good" price, but I think they have to be seen to be acting reasonably.

 

[MVP]

Barclays are in the banking business - I don't think they want to maintain a boat, check the de-humidifier is working, run the engines once in a while, pay mooring fees due about now etc etc., they just want to get back what they have loaned - fair enough in my opinion, I would do the same in their position

MVP

 

[wakeup]

Mike,

Agreed the finance co is in a stop loss situation no longer a customer service situation.

 

[capsco]

I am not diagreeing with you, I am just stating that as I understand it the LAW says they have a duty to obtain a reasonable price, not just sell at the first oportunity to obtain their money back, I am sure you can imagine how silly this could be, if taken to the extremes.

 

[enterprise]

I think wakup's comments are probably correct.

The boat probably never reached open market, the broker paid off the debt at cost in return for the boat, the equity is now the brokers profit or loss.
The broker will now market the boat as a trade in & is probably quite happy that he will exceed the "Fire sale" price.

A bit cut throat but the finnance company whoever they are, are not in the buisness of selling boats or cars or anything else, they lend money & it has to be comming in before they can lend it back out at exorbitant rates.

The broker will only payout what they can comfortably get back, they may need to sit on it for a while which could make the difference on turning a proffit.

I think the owner should have been notified of the figure that had been agreed between finance & broker & given an agreed time to settle or find a buyer, if marketing a well known boat with good resale then I would find it hard to believe that advertising it at £40k below the competition he wouldn't have been able to sell privately.

 

[wakeup]

But who is going to enforce this? The punter that cannot afford to pay the monthly repayments. Obudsman is probably the only way to go for this punter to stand a chance of any sort of redress and that would be less than certain.