Originally Posted by Minnewaska
Not so fast. This appears to be the case, as most loans are paid current and are not a priority, nor do most banks reconfirm these things.
However, if you find yourself in a bind and can't pay, there is nothing more powerful for the collection department at the bank than a strong case of fraud. If they can demonstrate intent to defraud, it is criminal. Although, just a civil action on fraud is much stronger than simply trying to get a judgement on a note or repossess collateral.
I wasn't implying that he'd be able to keep the boat and not pay the loan. What I meant by saying "once they write the loan they've written the loan" is that once they write the loan you are usually done answering their questions.
If he doesn't pay the loan then sure, they're going to repossess it, but nobody is going to repossess a loan that is currently being paid on.
As for fraud, I wasn't encouraging any felonys here. If the contract is written is stone cold clear language about living aboard and you lie about it, then yes, that is likely fraud. What I was recommended was taking advantage of any ambiguity there might be, just as your lawyer would do.