Originally Posted by DBOL
Look at Doc's post,I think he is right own,would you loan $ and take a chance not finding someone hiding?
Prepare to be put to sleep.
As Barbaraok and others have said - fulltimer loans are still available. Like other lending, fulltimer loans may be under tighter standards and by fewer lenders due to changes in Reg Z and TILA requirements. In addition, the financial collapse put significant pressure on the RV industry as a whole. Many companies went out of business or through restructure, further hampering the lending environment. Lenders like to know that there is a manufacturer behind the assets they are lending on.
In simplified terms - lenders are in the risk business. They attempt to project the severity of loss and the loss incidence for specific loans based on a number of loan, borrower, unit and other factors.
Loss incidence is influenced by things like loan to value, credit history, credit rating, debt to income, debt to asset, the lenders own and / or industry standard delinquency and default rates for example.
Loss severity is influenced by sales price, original loan to value, mark to market loan to value (estimated depreciation), age and condition of unit, unit make and model, and other factors.
Quantifying the level of risk for a fulltimer versus a traditional borrower loan is probably supported by little imperial data. Either borrower could default and run. The traditional borrower could sell their home or toss the keys in the mailbox and hit the road. The fulltimer could go into hiding. While either can run, in the aggregate, running by borrower type is probably non causal in defining incidence of default. In either event, both borrowers would need to go on a cash diet / basis or they would be found pretty quickly these days.
The point is, it's the incidence of default that's in question in assigning a higher risk to fulltimers. The difference between one and the other can be easily handled with a quarter point or more in rate, and / or a shorter term or higher down payment, maximum loan amount, or a combination of these.
The lender is required to hold loss reserves based on the type of loans on their books, the incidence and severity of their loss expectations, etc. Removing the presence of fulltimer loans would likely have a small impact on the loss reserves and the overall number of loans on the books.
My guess is that the incidence and loss on two like units, sold at like prices to similarly qualified borrowers, with the same amount down will be similar whether fultimer or not.
While the above is a simplified explanation of risk assessment, it is basically what happens. It's modeled and run by statistical programs in computers but those are the basic inputs. As long as it remains legal to make fulltimer loans, they will be made for "well qualified" borrowers. It's not personal, it's business. And while credit risk management is a mix of art and science, it's fairly well established and absent extreme market events, has pretty good track record. JMHO. YMMV