What's to stop a borrower from taking their boat out the country and defaulting?

[SirSailz]

On their loan? Or even worse taking it to another country and selling it to someone else there while not repaying the lender?

I've worked in the financial industry for 8 years (non-bank and no boat loans obviously) but a guy I know suggested this could occur.

I've seen those mid-sized boats that I am guessing could sail across the Atlantic or Pacific, what exactly is there stopping someone from "buying" (mortgaging/loan) a decent sized $300,000-$1 million boat that is and just taking off from their country?

I can't imagine it would be cost effective to try to repo someone in that situation. Factor in that some of these boats can be put onto a large trailer and stored in an array of endless global warehouses, rented pieces of land with ocean access, for years when most lenders would wipe the loan from their books and have given it off to multiple debt collectors.

I don't know that much about how boats are titled, but I do understand that they can be titled to foreign countries the person has no connection to.

So couldn't the person just leave the country with the boat, alter the boat a little bit and claim to have built it them self and get a new title under a flag of convenience and sell it to an unsuspecting buyer in a third nation?

I feel like I am missing something in the mix here like here, that just seems way too easy for the borrower to get off the hook? I feel my question is kind of a dumb question and I am missing something very obvious.

[GordMay]

Greetings and welcome aboard the CF, SirSailz.

[Psy at SEA]

No its not so silly as it seems...its the same as owning a car or a house, there is registration meeting requirements prior to acceptance.

Go figure.

[belizesailor]

Nothing to stop a financed boat from crossing borders and it is a potential problem for lenders.

It creates a job opportunity though: international repo work. I know folks who do this sort of work and have had such work offered to me, but dont want to get involved in cowboy stuff for meager small boat captain pay.

Hard to sell one though if the loan is properly filed because the boat must be re-registered...though there are many places that for relatively minor compensation you could probably get local officials to fudge the documentation.

Financing a highly mobile asset comes with added risk.

[letsgetsailing3]

It's not all that different from a car, really. Those are moved around as well. OK, not so much internationally, but enough to be a pain.

Credit is extended mostly on your credit record.

Most people with it don't want to permanently destroy it. Plus, on an expensive enough boat, they could likely get it back, even internationally.

I suspect that this rarely gets tested.

[taxwizz]

You need to let it be know that you have on retainer the Hell's Angels Collection Agency.

[belizesailor]

Originally Posted by taxwizz

You need to let it be know that you have on retainer the Hell's Angels Collection Agency.

I have a couple of friends who are ex special forces...they go along as crew with a captain in case any owners are reluctant to turn over the keys. [emoji6]

[sailorboy1]

Originally Posted by SirSailz

On their loan? Or even worse taking it to another country and selling it to someone else there while not repaying the lender?

same thing that stops most people who don't buy stuff on credit and then sell it to someone else and never pay the credit company back

[jackheape]

I read a book by Capt. Max Hardberger, "Seized" where he tell many stories about traveling internationally to recover vessels. His were large ships though.

[Cheechako]

The reality is if someone has the $ to buy an expensive boat and get the financing, they care about their credit rating and related things. So the risk to the lender is probably not too bad really. If you are leaving the country and never coming back, giving up your citizenship then maybe it would be different.

If you leave the country and keep ANY insurance, even just coastal/local insurance, active and make your payments, I doubt any question will ever come up.

[Jdege]

There is nothing to stop you from leaving, but there are likely to be some practical problems.

What will happen when you stop making payments against the loan?

Eventually, it will be foreclosed. At this point, you're in possession of stolen property.

You will find that in many counties having outstanding warrants will cause you problems as you try to check in.

And what do you plan on living on, while you're sailing around the world on your stolen boat. Do you have banking or brokerage accounts? You may well find the bank.that holds the loan winning judgements against you, and seizing your accounts.

Of course, you might will have enough to live on, on your stolen boat, even after the bank has recovered the cost of the boat - and associated legal fees - from your accounts. But if you did, wouldn't you have just paid for the boat in the first place?

[taxwizz]

Has anyone watched the TV series Airplane Repo ?
It is about exactly this situation.
Great show, but I think probably staged.
Very entertaining, the first few times.

[Capn Jimbo]

Please tell me that I'm not the only one to answer: morality, ethics, truth and honesty. Please...

[jrbogie]

Who in their right mind would buy a boat without a clear title???

[jrbogie]

Originally Posted by SirSailz

On their loan? Or even worse taking it to another country and selling it to someone else there while not repaying the lender?

I've worked in the financial industry for 8 years (non-bank and no boat loans obviously) but a guy I know suggested this could occur.

I've seen those mid-sized boats that I am guessing could sail across the Atlantic or Pacific, what exactly is there stopping someone from "buying" (mortgaging/loan) a decent sized $300,000-$1 million boat that is and just taking off from their country?

I can't imagine it would be cost effective to try to repo someone in that situation. Factor in that some of these boats can be put onto a large trailer and stored in an array of endless global warehouses, rented pieces of land with ocean access, for years when most lenders would wipe the loan from their books and have given it off to multiple debt collectors.

I don't know that much about how boats are titled, but I do understand that they can be titled to foreign countries the person has no connection to.

So couldn't the person just leave the country with the boat, alter the boat a little bit and claim to have built it them self and get a new title under a flag of convenience and sell it to an unsuspecting buyer in a third nation?

I feel like I am missing something in the mix here like here, that just seems way too easy for the borrower to get off the hook? I feel my question is kind of a dumb question and I am missing something very obvious.

Who in their right mind would buy a boat without a clear title???