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Jul 15, 2008 4:58 pm US/Eastern

The Repo Man: In Bad Times, He's A Bad Dream

The Repo Man Is A Confirmation That One's Financial Well-Being Has Hit Rock Bottom

FT. LAUDERDALE (CBS4) ― Times are good to cash in on the misery of others. As Americans acquire bigger and bigger mortgages and credit card bills, more and more of their debt is going bad.

For James Hedrick, that means it's a busy time in his line of work. He's a repo man.

He spends his days scanning yachts, sailboats and fishing skiffs as he steers his dinghy through a marina west of Fort Lauderdale's skyscrapers, looking for a piece of the American dream.

One particular piece is a gleaming white, 65-foot Hatteras with two master bedrooms, two full bathrooms and a full galley kitchen with glossy teak cabinets. The owner is $35,000 past due on his $1.5 million boat loan.

Hedrick is an agent with National Liquidators, considered by industry experts to be the world's largest marine repo company. The Fort Lauderdale-based company has tripled its business in the past three years, and now takes possession of about 200 boats a month in Florida, Ohio and California. The company's competitors also say they've seen similar increases in business.

It's not just boats: repo agents say banks and lenders have been asking them to reclaim all-terrain vehicles, motorcycles, small planes, snowmobiles, semi-trucks and, of, course, cars. Vehicle repossessions were up 10 percent in 2007 over the previous year, said Tom Webb, an analyst for Atlanta-based Manheim, the largest car auction company in the nation.

One boat dealer, whose company also does recovery for banks and lenders, says those facing boat repossession were typically involved in the housing boom either as a real estate agent, construction worker or mortgage broker.

Rising gas prices have also made it harder for owners to make room in their budgets for boat trips. Marine diesel fuel is over $5 a gallon in some places, which means a five-hour jaunt on the water can easily cost $250 for some gas-guzzling yachts. Last year's marine diesel cost about $3.40 a gallon.

Overall, the marine industry is hurting. Bankers say new boat loans are declining. MarineMax, the nation's largest boat retailer based in Clearwater, reported in April that sales fell 28 percent for its second quarter.

Because prices for used boats are falling, buyers can buy repossessed boats under 60 feet for as low as 40 percent of what the boat would cost new, said Robert Toney, National Liquidators' president. Boats larger than that are less likely to be repossessed because their wealthy owners are in a better position to weather a slowing economy, Toney said.

Aboard a 65-foot Hattras, Hedrick and his assistant board the yacht to take photos and catalog any personal items. There aren't many aboard, and the boat is unusually clean, save for a six-pack of Diet Coke and a children's video in one of the VCRs.

 

(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)

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© MMVIII, CBS Television Stations Inc. All Rights Reserved.