On the sun-splashed Florida peninsula, the US foreclosure crisis is sinking lavish lifestyles on land and at sea as luxury yacht owners increasingly find themselves high and dry.
The listing for a recent attractive property swallowed up by the crisis appeared to be a sea-front condominium: two bedroom/two bath, outdoor grill, water views, elegant and spacious. Satellite TV and temperature-controlled wine cabinet included.
It was a 18.3m yacht, docked amid a crush of other luxury marine toys at a Fort Lauderdale boat yard.
PHOTO: AFP
“We’re busting at the seams,” said Jason Lessnau, recovery manager for National Liquidators, the largest marine repossession company in the US.
The longer the mortgage crisis lasts, the more yachts end up in his boat yard — double and triple parked.
“Our sales numbers are up, our recovery numbers, every single number you can think of is through the roof for us right now,” he said.
With its deflated real estate market, Florida has become emblematic of the US housing woes after the real estate bubble saw prices spike then collapse.
Now, as the recession deepens and home prices keep diving in value, the problem is creeping beyond homes and high-rises, and prompting a hike in boat foreclosures too.
Experts say many boat owners made the same mistakes as homeowners.
The easy credit that fueled the real estate boom also brought carefree spending and no-money-down loans for maritime toys. Boats tend to lose their value more quickly than cars, so many owners soon owed more than their boats were worth.
The economic slump pushed prices still lower, but the bills kept rolling in.
Boat owners usually fall behind on their payments when they are hit by job loss — another side-effect of the economic downturn — or divorce. Like car loans, boat loans allow the bank to recover its collateral if the owner defaults.
A stark measure of the trend comes right off resellers’ inventory sheets. National Liquidator president Bob Toney says boat repossessions have nearly quadrupled over the last two years. He’s leasing four additional boatyards to keep up.
“A 350 percent increase in business is not all fun and games,” said Toney, who has seen many longtime clients and associates hurt by the downturn. “It creates some heartburn and stomach acid once in a while.”
Toney has also noticed a shift in the size of the boats repossessed. National Liquidators typically receives repossession orders for boats between 6.1m and 11.5m in length. They range from flashy speedboats to weather-worn sailboats to sturdy cruisers.
But there are several luxury yachts in the yard these days, suggesting the rich are not insulated.
“We’re seeing more 60 and 70-footers [18.3m and 21.3m] and a few in the mega-yacht field, 100-plus [30.5m],” Toney said.
“Some of those are owned by people you read about in the newspaper,” he said.
About half of repossessed boats are turned over voluntarily by owners, sometimes stripped of valuable equipment, such as radar systems. The other half are “involuntary” transfers, meaning repossession teams tow them away quietly in the middle of the night.
Repossession teams usually arrive in low-profile dinghies.
One person sets up the tow lines while another cuts the boat free and a third person disconnects electrical lines. A seasoned repo team can tow a boat off a dock in less than 60 seconds.
Sometimes the boats still contain the trappings of yesterday’s excess: discarded champagne bottles, drugs, a jet ski.
Lessnau, the recovery manager, said larger boats often end up overseas after auction — buyers with euros see especially deep savings.
“They can purchase at an instant discount and ship the boat back to Europe. That’s still a strong market,” he said.
Strolling through the boat yard, Fabienne Varela and her husband said even in dollar-terms they have seen prices slashed almost in half since the housing collapse.
While they feel bad for those losing their boats, “we’re trying to take advantage of the economy,” Varela said. “That’s what [US President Barack] Obama says: spend, spend, spend.”
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS