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Old 01-30-2012, 04:37 PM   #1
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Can't Refinance Because We're Full Time

Our Motorhome is financed with USAA. I looked into refinancing today since interest rates have dropped since 2009. After they tell me that they can save me $300 per month, they tell me they cannot refinance my motorhome since I live in it full time. Additionally, they said they would not have financed it originally if they had known I was going to live in full time. They cited Regulation Z (Truth in Lending). I couldn't get any progress or a better explanation out of them.

How does anyone refinance (or finance) their motorhome if Federal Regulations don't allow it? I have looked at other threads in irv2.com which address this, but I didn't see an answer as to how Regulation Z prohibits these loans and what our options are (other than lying to the lending agency).

Any help would be appreciated.
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Old 01-30-2012, 05:06 PM   #2
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I suggest contacting another rv specialty lending company, Essex or one recommended by Good Sam, etc. I think that the full-time excuse by USAA is a bunch of BS.

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Old 01-30-2012, 05:11 PM   #3
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They were simply blowing you off. If you read the entire Regulation Z, most of it is for the protection of the consumer against fly by night lenders.

I have my coach financed though my credit union. At the time, December 2003, I requested a 20 year loan at 5.62%. They are no longer writing any RV loans like that but they wanted my business at the time because I had gotten a similar quote from a competitive RV finance company who would write me a loan at that rate and term.

I am on my 9th year and the loan is completely upside down but I am not concerned about that as I knew this was going to be the one and only coach I would ever own.

Oh, by the way, I am on my 9th year as a full-timer also. My credit union isn't concerned about how I use the coach as long as they get their money each month. Now the insurance company is a different story. They want to know whether it is being used full-time or not as there is different coverage when using it full-time.

Only my opinion.

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Old 01-30-2012, 05:36 PM   #4
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we get around the "in it full time" clause by having a small 756 sq ft apartment/rv port to call "HOME". we get tax breaks and insurance breaks and are free to travel as we please

you may also use your children if you have em, as your residence then use your m/h as you see fit for extended trips


we use a credit union for our rv loan, if it helps
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Old 02-02-2012, 06:58 AM   #5
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I don't think the new regulation prohibits financing full-timers per se, but it may make things a little more difficult for the banks (as has been stated, the regulations are designed to protect the consumer), which is probably the reason they don't want to do it.

Advertisements for Essex Credit state they finance full-timers. I don't know what their rates are or if they do refinancing, but you may want to check with them.
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Old 02-02-2012, 08:09 AM   #6
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Gee, I wonder why they don't want to re-finance a loan where the collateral isn't worth the prices of the loan and where the collateral isn't in a fixed location, but mobile? Why would they assume that when the borrower quit making payments the collateral might be across the country in an RV park with a few months back rent owing also? Upside down loan, a lien for back rent, and across county repo. Sounds like good business to me, where can I invest my money?

It surprises me that banks and CU's loan money on RV's that will go upside down when you drive off the lot in the first place. I'm glad they do, because I bought mine in a deal to keep it from going to repo. The seller was a stand-up person in that she was upfront with the finance company and worked to avoid a forclosure. (husband died, couldn't continue payments)

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Old 02-17-2012, 03:41 PM   #7
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We were turned down by Bank of the West because we are fulltime. Our dealer finance mgr says many banks just don't want the hassle because it changes their investment mix. Alliant CU will, ad in Escapees mag, but involves more documentation.
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Old 02-17-2012, 04:13 PM   #8
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Do the fulltimers have a "domain" state or place you call home?
Seems to me if you have the assets... the loan shouldnt be the problem.
Only issue I could see is the banks not wanting to restart an interest clock on a highly subjective valuation.
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Old 02-17-2012, 04:57 PM   #9
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We changed our domicile to SD. Do not own anything. Our drivers license address is our mail forwarding service. SD requires a 1 nite stay. We flew in, stayed at hotel, took receipt with both our names on it to DMV, $20 , eye test, and gone. Our voting address is the hotel.

We use Alternative Resources in Sioux Falls, there are others, they all know the rules and will help. 3% tax on new vehicle, registration is based on weight.

SD is a title holder state, so if you don't have title, it can take awhile for plates to get to you. But mail service can handle all for you. We were lucky, I was able to get our coach title from CU and hand carry. Car we received after we got back to NV.

There was even a special window in the courthouse for us to get coach registered and plates, they work close with the mail service.

SD is very friendly.

We will have to go back every 5 years to renew DL. I am now awaiting my absentee ballot.

Health ins wise, we are lucky. I just went on Medicare and Tricare for life, wife goes on in 2 years.
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Old 02-17-2012, 05:03 PM   #10
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Resolution

The problem that Regulation Z creates for lenders is that they must guarantee to the feds that they are collecting appropriate local taxes on any mortgage, and since the RV moves around they don't know how to do that. If you say the RV is your home, it creates the problem. As paz said, it's not that Regulation Z prohibits the loan, it's that the mortgage companies haven't figured out how to comply.

It has nothing to do with our assets, or being upside down on the loan, or state of residence, or which company you use. This is new in mid-2011, so if you financed before that you haven't run into this problem. You will if you try to refinance your RV or finance a new one.

We solved the problem the way that powerboatr and others have - we rented a place to have a physical address. We rented a room from someone and listed that as our physics address. That solved the problem. We save more in our refinanced RV payments than we pay in rent, so we are ahead of the game.

The lending company asked where we rent and from whom, but didn't ask for proof; even though we have a signed lease and everything. It was a lot of trouble to go through for no apparent reason.

I am curious if anyone on irv2 has financed a motorhome since mid-2011 and told the lending company that they live in their RV full-time? I'd like to hear from you!

Thanks.
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Old 02-17-2012, 05:08 PM   #11
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What local taxes on a loan?
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Old 02-18-2012, 04:54 PM   #12
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Quote:
Originally Posted by Perry White View Post
What local taxes on a loan?
The banks are required to collect and place in escrow local property taxes for houses that are being financed.

The way the law is written, the banks think they have to do the same thing for an RV that is being used by a full-timer as a principal residence. Since there aren't any property taxes to collect for an RV, they don't want to finance full-timers.
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Old 02-18-2012, 05:02 PM   #13
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Quote:
Originally Posted by paz View Post
The banks are required to collect and place in escrow local property taxes for houses that are being financed.
Right, and since we live in the RV full-time that makes it our home, so they must collect and place in escrow the property taxes, and they don't know how to do that. If it is not our home, Regulation Z doesn't apply evidently.
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Old 02-18-2012, 07:44 PM   #14
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Weird... I bought our moho in May 2011, and between then and now have refi's 4 mortgages.
In all cases, when asked about escro for taxes, I tell em "I pay the taxes myself" and they say "yes sir" Don't know what this new rule is...
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