Banks and bankrupt car washes

[Patrick H. Crowe]

Dear cfcw:

I hope you are aware of and told the bank that what the washes sold for before has almost no real signifance in their current value.. See automobiles, then antique automobiles.

One of the washes under discussion here sold in 2002 for roughly nine times what the bank is now ASKING. All that proves is that the man paid way too much, the SBA backed to loan - - - so why should the bank care? Bankers and the SBA generally know almost nothing about car wash values. Dah? They should read and study my book.

Patrick H. Crowe

 

[Patrick H. Crowe]

Dear Indiana Wash:

Here are some of the false assumptions you made:

1. You assumed I was the one who "initially" contacted the bank. I was not; your assumption was false. Did you read what I wrote?

2. You assume I "know" what the property is worth. Yet unlike your offer of about 50% of appraised value, mine was over 60%. Since I formerly owned the property isn't there at least a fair chance I do know what it was worth. I wrote a chapter about this property in my Car Wash Appraisal Handbook.

3. You assume the property was appraised to determine the price. So far as the real estate agent knew "the bank set the price".

4. You assumed "that in each and every case, someone else eventually offers considerably more than the 'know it all'". Doubly oxymoronic. First you suggest I am the "know it all" ("has a book to push") then I explicity tell you I was the someone who offered more than the initial offer - - the real estate sales person told me so. The apology is still called for; the question about whether you read what I wrote remains.

5. I did not ask "why" .. Your clearly can't read what you yourself wrote if you can't see your multiple false assumptions.

6. Finally you return again to name calling: "knows" what the property is worth now becomes "defensive".

I was the someone who offered "considerably more" (than the initial offer). I notice you appraently want to stick with you "bigger fool" theory. You are welcome to it.

Patrick H. Crowe

 

[Indiana Wash]

Give it up. All you do is get on here and plug your book. Apparently, the assumptions I made were correct, right?

1. You asked why the bank does not do what you think is in their best interests, I explained why. No one said you were the one who initially contacted them. No assumption. Your defensive conscience inferred that I was assuming. Please re-read.

2. Again, I made no assumption. However, again, you state that you do know what the property is worth. So, even if I made the assumption, it was correct.

3. The bank set the price. That price is an appraisal whether it was done by a licensed appraiser or not. The definition of appraisal is the estimation of value by someone. So, if someone from the bank set the price, it was appraised. DUR!!!!

4. Please include the rest of the paragraph when arguing. I am speaking from my experience managing an REO department. No, I am not pushing a book, just letting you know from years of experience and a doctoral degree.

Clearly, you have a chip on your shoulder. I guess I will refrain from responding to your posts when you will clearly internalize anything that is said. Please grow up and go try to sell your book. Apparently, its about all you have going.

 

[Allenz]

Hi,
Thanks to all of you for your advice and valuable suggestions.........

 

[Ben's Car Wash]

It seems to me it would make more sense for lenders to work with the existing owner, who may be under water. So what if they have to redo the loan, and stretch it out for an addtional 5-10 years. That would seem easier to me than going through the foreclosure and auction process, and cheaper. And, it possibly puts a performing loan back on the books.

They won't do it. I tried. The TOLD ME TO SEE MY ATTORNEY when I handed them $50,000, enough to carry me into this year. The banks don't want to help businesses, that's why they aren't lending the TARP funds out. They want the best of both Worlds, no risk and all colateral..... that's not what helps entrapenurs get businesses started.

 

[JK Xpress]

Ben's Car Wash - in this post as in prior posts, you are leaving out the important details. Why did they foreclose on you? Understanding that the FL real estate market tanked, did the value of your loan exceed the value of the underlying collateral?

Your bank did not just show up and foreclose on your property. Unfortunately for what ever the reason, you violated some of the covenants in your loan agreement. Your lender then examined their position they were in and determined they no longer wanted to work with you so the started the process.

About 10 years ago, I was a workout officer with a very large commercial bank, I sent out a letter of default to 1 of my accounts because the CFO negelected to send us the quarterly 'Excess Cashflow' calculation. The CFO violated 1 of the numerous covenants of the loan agreement, the borrower than started missing interest payments....... needless to say, we hired a Turnaround Consulting firm and they developed the exit strategy for us.

 

[Ben's Car Wash]

JK,

I WAS NOT IN DEFAULT at that time. If fact I approached the banker before I was behind in any payments seeing what was happening and asking to: 1 restructure, 2 go interst only. They said no. So when I got 30 days, they told me "get current and well go interest only" so I cashed in $8,000 in stock and payed current, they didn't hold thier end. Again We got to 30 days and I asked for interest only of to restructure, they said no. I got to 60 days and cashed in $50,000 in 401 that I had, my wife walked in and handed them the certified check (that was drawn from their investment brokers). They told my wife they won't take it and to call my attorney!

We agreed within 3 day to do a "deed in leiu of" between the bank and my attorny. I was not in DEFAULT... I never got a demand letter.

Since that time (July) they have dicked around and dragged this out and went from a deed in leiu one week to a foreclosure the next. Meanwhile they re-appraise the business that was 50% over what I owed to now a loss. It was appraised 3 months before I closed at 50% equity! Now, I don't know BC I haven't recieved the latest copy done 2-3 months ago.... but I'm sure it well below what I owe.

 

[Ben's Car Wash]

BTW, the appraisel was ordered by the bank and was low IMO 2-3 months before I closed. Had I chossen an apprasier It would have been 10-20% higher. I tried to sell for over a year. I had collateral, I had equity, I had a signature line, I had a credit score over 770.

I payed off my signature loan personally ($18,000) since I closed as we agreed to do the deed in leiu. I stayed current with another loan as agreed and kept bank accounts as agreed. They broke the agreements and did not do the deed in leiu and decided to go foreclosure to secure MORE COLATERAL.... my personal property!

 

[JK Xpress]

So you cash in some stock that probably leads to Capital Gains Tax; you redeem some 401(k) assets that has tax implications and early withdrawal penalty - and the bank turns its back on you. What a crappy situation to be in.

Regarding the current situation in the financial services sector, does anyone know are there are any honest bankers left? Are there any honest banks out there, that do deals because they make sense? Management and the Board of Directors of these mega banks need to be held accountable for all these bad deals - going to be big lawsuits against some of the banks that took TARP $'s.

 

[pitzerwm]

You did get screwed Doug, I've been saying for years never trust your banker. They will screw you every time. Sounds like your attorney negotiated a deal and he can hold them to it.

 

[Jimmy Buffett]

They are not all bad. My lender called me at work the other day and said "we can lower your rate from 6.125% to 5.25%". I asked what I had to do and they said sign a paper. My payment went down $250/month and the 5.25 is locked in.

 

[Earl Weiss]

Right. Had one dope worked with from June to Oct. and then they said they couldn't do the loan for reasons they knew about in June. Environmental No Further remediation letter was 3 years old. They made up all sorts of excuses and when I countered each which was not hard to do since I have closed over 500 real estate deals in over 25 years, I told them they should just say they are not doing loans. At that time they wanted 7% plus one point and a pre pmt penalty of 5,4,3,2,1. They also wanted all my banking business. I also wanted it structrued as a securedline of credit which they would not do. Theyt had been soliciting my business for years.

Went to another guy who had done my clients' deals. Asked if he had $. He said yes. Deal closed withoin a month. A secured line of credit at Prime plus 1. No pre pmt penalty. I sent the first banker a letter thanking them for being screwups since the other deal was so much better.

 

[pitzerwm]

Jimmy, you must be sleeping with the guys wife AND keeping her happy. He is a rarity. He probably won't last long as he will get tired of the normal BS and go do something where he can make a difference and be appreciated.

 

[Jimmy Buffett]

It was Farm Credit. I was impressed.

 

[pitzerwm]

Well, Farm Credit isn't your typical bank. But it still is beyond impressive.

 

[Jimmy Buffett]

That still won't be low enough if it keeps raining every friggin weekend!

 

[Ben's Car Wash]

You did get screwed Doug, I've been saying for years never trust your banker. They will screw you every time. Sounds like your attorney negotiated a deal and he can hold them to it.

well isn't it funny how fast some of the banks who took TARP funds are trying to give it back after Congress passed that 90% tax on Executives of firms who took TARP FUNDS! Now they really didn't need it, but wanted it to make the books look better and to acquire other banks, yet they lending lines never went up.

A recent survey of bankers: 98% agreed that their compensation structure lead to the financial situation we are in.

http://www.charlotteobserver.com/business/story/609389.html

 

[Ben's Car Wash]

The jobs report isn't helping either. The u3 at 8.5 but comparing apples to apples (the unemployement # changed in 93' under Clinton) the real rate of unemployeed is the u6 which is 15.6%. That the average unemployment rate from 1930-1936! And we have 3-6 more months of job losses ahead. We are now into our 17th month of this recession. Florida is getting hammered, as is Mich and Ohio, California and Navada. No state is now untouched. It will take another year for people to clear their bankruptcy's. Right now I'm only in the mode to preserve what wealth I have left and take care of my family. The hell with the banks, they had their chance to help work it out, now they can eat it. Health care has jobs..... bankers don't! I'll be eating.