Guide to Trailer Foreclosure
Making the Most of Foreclosed Trailers
In recent years, it has become increasingly easier to find foreclosed trailers due to the economic challenges facing our country. Trailer foreclosures occur when the borrower falls behind on payments. When this happens, the bank then determines whether or not the borrower will be able to continue making payments; if not, then the bank begins the foreclosure process. Before foreclosure is complete, the borrower can still redeem the trailer by paying back the loan amount in full. Once foreclosure is complete, however, the borrower no longer has any claim on the trailer, and the bank takes full ownership.
Even when foreclosure seems imminent, the borrower still has a few options. First of all, the borrower can try to renegotiate with the lender for either a lower interest rate or a lengthening of the loan repayment period, either of which will reduce the monthly payment amount. Another option is to try to negotiate a short sale. In this case, the lender would agree to have the trailer sold at a lower price and would thus take a loss on the trailer in order to recoup at least some of the loan amount. Finally, as a last resort, the borrower could file for bankruptcy.
If the borrower is unable to negotiate with the lender and does not want to file bankruptcy, then foreclosure is the likely result. Though unfortunate for the borrower, a foreclosed trailer can be a great deal if you are in the market for a new trailer. All new trailers depreciate as soon as they leave the lot, so there is already a 30% discount when you purchase a used trailer, even if it is only a few months old. In addition, when a trailer has been foreclosed on and then repossessed by the bank, the bank then needs to get rid of it as quickly as possible. This is because the trailer has become a financial and business liability for the bank. Because the bank is not out to make a profit, they will sell it for well below its value, just to ensure that it is sold. The bank not only has to pay storage fees for the trailer, but the remaining loan amount on the trailer takes away from what the bank is able to loan out, thus reducing its money-earning ability.
To find foreclosed trailers, you can either go to a dealer or go to a bank auction. You will get a better deal at a bank auction, but will probably have to do a little digging to find one. Either way, you will save significantly on a trailer in great condition by purchasing a foreclosed trailer.