USA | GrainTrader - 1/27/2021 19:56
I hear some horror stories of farm credit in the 80’s calling some loans on guys who could make the payments still.
They are the best show in town currently here though with locked in long term rates and the patronage dividend. Have considered if I buy another farm I’d look elsewhere to spread my risk between a different lender.
But wondering if what was in the language of loans in the 80’s was still in most land mortgages that are locked in interest rates ? I realize it’s irresponsible that I have to ask This and don’t know myself, but that’s the case...
If you can make the payments and continue to have more than enough equity to meet lending requirements, chances of having a loan called are slim and none.
Problem is when the value of the asset falls below the % required, is when things can head south. If a person does not have the means to add other assets to help secure the loan.
I doubt if see problems with Farm Credit like the 80s. Farm Credit was bleeding like a stuck pig like it's customer's were. Farm Credit that I deal wit has 20% Capitol, most rural banks are around here are about half that. Way the numbers currently look, borrowing $ from Farm Credit look less risky than dealing with a rural AG bank. |
Loans called in the 80’s vs what could happen now?
