Rebecca Lytle of the San Francisco Federal Credit Union with help from Chris Hayashi led the buyers portion of the June 7, 2010 Town Hall Meeting with sellers and buyers.
Because I've already posted on this subject a couple of times recently and because the subject is very complex, I'll make this article short and sweet. To research this further contact Ms. Lytle at 415.359.2926 or check out the Taxi Medallion Financing website.
A Few Points
The list on the left gives the interest rates and monthly payments for various different situations.
For someone who takes part in the Down Payment Assistance Program, however, the interest rates and payments would be higher. For instance the figures for a buyer who only puts down $12,500 would read:
- 3/25 Balloon 8.25% Interest $1,873 Monthly Payment.
- 3/15 Balloon 8.00% Interest $2,270 Monthly Payment.
- Some examples.
So of course the larger the down payment, the smaller the monthly payment.
The most interesting (and unusual) feature of this package are the options of paying off the loans over 3-year, 5-year, 7-year or 12-years periods. The payments on the 12-year loan could pretty much be covered by the monthly check given out by some of the companies.
And, of course, the sooner you pay off the loan, the less money you pay for the medallion thus making it more valuable.
Q & A
Q: Do I lose my place on The List if I'm turned down for a loan or finally choose not to buy?
A: No. You are removed from The List only if you do buy or fail to follow the rules.
Q: Do I lose my medallion if I finally choose not to sell?
A: Once you execute the sellers agreement, you are committed to sell. Otherwise the medallion stays with the current medallion holder - as long as he or she follows the rules
Q: If I have bad credit or no credit will I be turned down for a loan?
A: Not necessarily. It depends upon your overall financial picture.
Rebecca Lytle once again emphasized at the meeting that she thinks that "most applicants will be accepted."
Criticism
A few drivers criticized Chris Hayashi for only having a single loan group available. One guy even stood up, screamed that the interest rate should be 4.5%, and left - without bothering to tell us where such terms might be available.
Driver Tariq Mahood, who is not on The List and therefore is not eligible to buy, attacked Hayashi for not opening the process up to more lenders, an attack he continued the following morning with an e-mail sent to seemingly everyone in the taxicab business.
Response
Hayashi said that any lender qualified by Taxi Services could participate as long as they have no early payment penalties or other fees. She wants the loan companies to be qualified so that medallion holders aren't preyed on by loan sharks or controlled by taxi companies.
She said that she took a call this morning from Medallion Financial in New York (possibly motivated by Tariq) and told them to send her a letter to start the qualification process - just like she'd do for any other financial company that called her up.
And, of course, the sooner you pay off the loan, the less money you pay for the medallion thus making it more valuable.
Q & A
Q: Do I lose my place on The List if I'm turned down for a loan or finally choose not to buy?
A: No. You are removed from The List only if you do buy or fail to follow the rules.
Q: Do I lose my medallion if I finally choose not to sell?
A: Once you execute the sellers agreement, you are committed to sell. Otherwise the medallion stays with the current medallion holder - as long as he or she follows the rules
Q: If I have bad credit or no credit will I be turned down for a loan?
A: Not necessarily. It depends upon your overall financial picture.
Rebecca Lytle once again emphasized at the meeting that she thinks that "most applicants will be accepted."
Criticism
A few drivers criticized Chris Hayashi for only having a single loan group available. One guy even stood up, screamed that the interest rate should be 4.5%, and left - without bothering to tell us where such terms might be available.
Driver Tariq Mahood, who is not on The List and therefore is not eligible to buy, attacked Hayashi for not opening the process up to more lenders, an attack he continued the following morning with an e-mail sent to seemingly everyone in the taxicab business.
Response
Hayashi said that any lender qualified by Taxi Services could participate as long as they have no early payment penalties or other fees. She wants the loan companies to be qualified so that medallion holders aren't preyed on by loan sharks or controlled by taxi companies.
She said that she took a call this morning from Medallion Financial in New York (possibly motivated by Tariq) and told them to send her a letter to start the qualification process - just like she'd do for any other financial company that called her up.
At least she thinks so - this is the first finance company ever to cold call her.
A Defense
The criticism of Hayashi implies that she is either incompetent or dishonest. It also assumes that there are thousands of banks, credit unions and other financial institutions just eager and ready, jumping at the chance to lend to money to taxicab drivers.
The truth is this:
Last winter, Director Hayashi sent out letters to all 34 San Francisco credit unions (from a list provided by me) inviting them to partake in a Town Hall meeting about loaning money to cab drivers for the purpose of purchasing a medallion.
Three credit unions (3) sent representatives to the meeting joining a banker from The Bank of the West who had been invited by their client, Cindy Ward of Desoto Cab. All three reps disappeared within 45 minutes. The banker stayed out of deference to Cindy but his knuckles turned white from clutching his chair and he stared at me with a fixed, nervous smile while I tried to convince him that I would have made a good bet on a loan despite the fact that I'd paid for everything in cash for 20 years and had a 0 credit rating.
None of these four financial representatives ever contacted Hayahsi again.
The fact that a loan package exists at all is little short of miraculous.
I don't know where or how Hayashi found the lenders. I have no idea how she matched the San Francisco Federal Credit Union's local understanding with the Montauk Credit Union's expertise and brought in the other two companies to make the loans possible.
If I write a book about the creation of this Pilot Program (a thought becoming serious), I'll need to devote a chapter to this all by itself.
In addition, the loan package is better than anything else on the market.
- There are no early payment penalties like there commonly are in New York.
- This is the only type of loan from any credit union in the country than requires less than a 20% downpayment from the buyer.
- SFFCU and Montauk actually will loan money to people like myself who are responsible but have no credit history.
Putting this package together was one of those mysterious actions that only Chris Hayashi could have pulled off. It matches her other feats:
- A year ago, I would have put the odds against the Pilot Program existing at 100 to 1. I interviewed her at about that time and told her that coming up with a program that would satisfy the Mayor, the MTA, the Board of Supervisor and the various cab factions would take the wisdom of Solomon. I was trying to make her feel good. I didn't think Solomon could've done it.
- In the space of less than two weeks she turned the MTA Board from being 6 to 1 against her to 6 to 1 in her favor and Malcolm Heinicke still doesn't know what happened to him.
- She actually did get a consensus (minus Gruberg of course) from cab drivers about the Pilot Program. Think about this! When was the last time you heard two cab drivers agree on anything?
- And, since the plan passed, without Hayashi to hold their hands, many of these same consensus drivers have reverted to form and are savaging each other on e-mail lists.
Face it! The woman walks on water.
As for her critics? They know not of what they speak.
I guess this post wasn't short after all. But it was sort-a sweet.
SWEET...paul harting
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