Stoner Loan Applicant

[Ghel]

I got a call from a young man this afternoon. Imagine all his lines said in a slow, drawn out voice.

Me: Good afternoon. This is Ghel.
SC: Um, hi. This is Kyle. Do you do loans against car titles?
Me: Yes, we do. How much money were you looking to borrow?
SC: Umm.... one or two hundred dollars, I guess.
Me: Ok. What kind of a term were you looking for? We could probably do a one year term for that.
SC: um, ok?
Me: .... You probably want to know what interest rates look like, right?
SC: suuure...
Me: What year is the vehicle?
SC: It's a 13 <make and model> with xxx miles.
Me: <I only asked for the year.> Ok, for that year vehicle, and that short of a term, you'd have an interest rate of x.xx%.
SC: ok...
Me: So, if that sounds good to you, would you like to pick up an application?
SC: Oh, I have to fill out an application?
Me: Uh, yeah. You have to fill out an application, and we need proof of income, then we pull your credit and get you credit qualified.
SC: Oh. Well, thanks. <click>

The only thing I can figure is that he was looking for what he thought was easy money to buy drugs.

[fireheart]

Sounds like drug money.

Although from the sounds of it, he was either too stupid to realise there are payday loan places out there, or that he's too smart to use them (I know they can charge HUGE amounts of interest on the loans)

[Ghel]

There's no payday loan places within walking distance.

"Kyle" and an older man (maybe his father - I'm not sure) came in to pick up the application. I didn't really expect that. I asked if they were applying jointly (yes) and showed them where to put what on the application. Then I asked for proof of income. Apparently Kyle has no income because he asked the other man if he brought it with. Nope. And they complained about having to walk home to get his paystub.

Walking? Where's the car they wanted to use as collateral? The older man was waving around the title for a vehicle, but the vehicle itself was nowhere to be seen.

I also explained that the fees for the loan would be almost 1/3 of what they were borrowing, but that didn't seem to phase them much.

I'll update this if they bring the application back.

[bankworking]

Sounds fishy. Maybe the car just isn't running, which is probably not a big deal with how little they're asking for. Could be an attempt at a scam. In my state, we can look up a VIN online and check the active title number that matches it. So if someone, say, claimed a title was missing, got a duplicate title, sold the car, then tried to do something with the old, no-longer-valid title, we can catch the fact that the title isn't the current one.

[Ghel]

Yeah, I'm suspicious. If it's for gas (which would explain why they're walking), why would we expect them to be able to repay the loan? If it's for drugs, we don't want to touch it. I can't wait to see what they put on the application for a purpose, if they even bring it back.

[manybellsdown]

Mr. Bells' car was stolen about 8 or 9 years back, and they took the title (which for some reason Mr. Bells left in the glove box). I don't know whether they tossed it or kept it (probably tossed it since the car was recovered full of the thieves' stuff), but I'd say it's possible they don't even have a car at all, just a stolen title.

[icmedia]

Mr. Bells' car was stolen about 8 or 9 years back, and they took the title (which for some reason Mr. Bells left in the glove box). I don't know whether they tossed it or kept it (probably tossed it since the car was recovered full of the thieves' stuff), but I'd say it's possible they don't even have a car at all, just a stolen title.

And these geniuses are about to put both of their names, addresses, and social security numbers onto a legal document that ties them to said title.

For that fact alone, I truly hope the title is stolen, for that would make the World's Dumbest Criminals regional semifinals.

[Ghel]

"Food and Gas." That's what they put down for the purpose of the loan.

The older man brought the application back just now. He didn't bring proof of his income. He didn't have his ID with him. They listed "none" for Kyle's income (at 33 years old).

He did bring the title with, though. There was a lien listed on it.

Me: I see there's a lien listed here, for <other bank>.
SC: Yeah, we owe about $30,000 on it.
Me: <inward sigh> Then we can't use it as collateral.
SC: Well, we've got a truck, too, but we owe $25,000 on that.
Me: We can't use a vehicle that has a lien on it. We could try to do it unsecured, but the requirements are a lot stricter.
SC: We've gone a couple other places, but they said they couldn't do it.
Me: If they can't do it, we probably won't be able to, either. We can still try if you want, but it's pretty unlikely.
SC: No, I don't think that you'll be able to do it anyway.

Let's count the fail: they applied other places, knowing that their credit stinks, knowing they don't have collateral they can offer, without their proof of income (which I specifically asked for), without their ID. I don't know how they got the loans they admitted to, when their combined income is only $15,500/year. It's no wonder they can't afford food or gas.

[mjr]

"Food and Gas." That's what they put down for the purpose of the loan.

The older man brought the application back just now. He didn't bring proof of his income. He didn't have his ID with him. They listed "none" for Kyle's income (at 33 years old).

He did bring the title with, though. There was a lien listed on it.

Me: I see there's a lien listed here, for <other bank>.
SC: Yeah, we owe about $30,000 on it.
Me: <inward sigh> Then we can't use it as collateral.
SC: Well, we've got a truck, too, but we owe $25,000 on that.
Me: We can't use a vehicle that has a lien on it. We could try to do it unsecured, but the requirements are a lot stricter.
SC: We've gone a couple other places, but they said they couldn't do it.
Me: If they can't do it, we probably won't be able to, either. We can still try if you want, but it's pretty unlikely.
SC: No, I don't think that you'll be able to do it anyway.

Let's count the fail: they applied other places, knowing that their credit stinks, knowing they don't have collateral they can offer, without their proof of income (which I specifically asked for), without their ID. I don't know how they got the loans they admitted to, when their combined income is only $15,500/year. It's no wonder they can't afford food or gas.

Are these IRS liens, or are they finance notes?

I ask because that's $55,000 worth.

$55,000 worth of car notes on a $15,500 income should be derelict on the part of the dealers that sold them the vehicles.

Assuming for a moment that these are new vehicles, at a (generous) 9% interest rate (considering their self-admitted "bad credit"), for 72 months, that would make the total monthly payment combined for both would be around $991.40.

Wow.

[Ghel]

The one I saw was apparently a finance note. I have no idea how the dealer could have justified selling either of these guys a $30,000 car. They listed the montly payments around $490 each, so around 80% of the guy's monthly income is going to car payments.

I also notice that they live at the local rent-controlled housing place. A place which always looks at assets when determining the renters' rent amount. This vehicle is brand new, so I wonder what effect that will have on their rent amount next time it's reviewed.

I won't be surpised if I hear that the car has been repossessed within a year.

[mjr]

They one I saw was apparently a finance note. I have no idea how the dealer could have justified selling either of these guys a $30,000 car. They listed the montly payments around $490 each, so around 80% of the guy's monthly income is going to car payments.

I also notice that they live at the local rent-controlled housing place. A place which always looks at assets when determining the renters' rent amount. This vehicle is brand new, so I wonder what effect that will have on their rent amount next time it's reviewed.

I won't be surpised if I hear that the car has been repossessed within a year.

Yeah, I used the wrong formula above. Looks like they would have combined payments of around $991.40.

But still...yeah, that's a ton of money, percentage wise, to spend!

[taxguykarl]

They probably had co-signers or bumped up their income on the vehicle finance applications. Ghel's probably right: those rides will be repo'ed sooner than later.

[Ophbalance]

How can they have a title but not have paid off the loan? My bank has the title on my car, and I won't have it in my hands until it's paid for.

[Ghel]

I don't know if it's different in different areas, but here in Minnesota, the owner of the car holds the title, but the bank gets listed as lienholder on the title, so it's there when you look at the title. The bank also gets a lien card, which shows that they have a lien against the vehicle, too. The state keeps records of both the owner and the lienholder information, and any replacement titles issued would still list the lieholder, if the lien hasn't been released.

[BrenDAnn]

Odd, I'm one state south of you and we do things differently. Like Ophbalance, around here, the bank keeps the title until the vehicle is paid off. I know this, because I remember being so anxious to get the title to me '01 Impala when I paid it off. As for your applicants...those cars won't be theirs for long at all, I'm afraid.