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PCGS loan on my coins smooth transaction with Mr Mike Lewis
compromonedas
Posts: 1,163 ✭✭✭
Instead of selling few of my best coins I decide to talk with Mr Mike Lewis at PCGS . I got a line of credit of about 80% of the price guide for my PCGS coins.
I have to say that it was a quick (less than 2 days!) and painless transaction. RECOMENDED!
Keith
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Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>What's the interest rate on the loan? >>
400%
"Enquiring" minds want to know!
History of the US Constitution Coin Set
Here is the information
Loan for coins
Keith
<< <i>Wow, 200 questions in 5 minutes!
Here is the information
Loan for coins
Keith
Wow, PCGS is a coin grading company and a BANK. That's fraking funny!
It is only after the deal is originated that things can turn into something that is not upbeat, friendly and cheery [particularly if the loan is not paid back].
Most people do not read the fine print on the paperwork prepared by the lender [specifically the lender's attorneys]; and even if they do read the find print in most cases they do not understand the fine print.
I have read such documents in detail and have drafted these types of documents. Needless to say, these documents are typically very, very, very one sided and draconian in favor of the lender [no big surprise] and are very harsh on the borrower [also no big surprise].
If the person who posted the OP takes an hour, with no distractions, to read the fine print and understand same, it will give him lots of extra motivation to make sure he pays the loan back.
BTW, I can understand a dealer using inventory as security for a business line of credit. However, for a collector I do not understand why one would want to borrow money and provide the lender with your coins as collateral. Since, IMO, the hobby should be "fun" and financed with discretionary dollars, borrowing against your collection [for leverage to use in increasing your collection; or just to have access to additional credit] seems to defeat the purpose of having "fun". Just my opinion though. To each his own.
<< <i>What is the interest rate? >>
Prime + 400 bps. The link is provided above.
I guess what goes around, comes around.
<< <i>Prime + 400 bps. The link is provided above. >>
Yow. I can get a cash advance off my USAA AMEX at prime -- currently 5%, and it's unsecured. Plus, if I have the advance dumped directly into my USAA bank account, there is no cash advance fee.
<< <i>Instead of selling few of my best coins I decide to talk with Mr Mike Lewis at PCGS . I got a line of credit of about 80% of the price guide for my PCGS coins.
I have to say that it was a quick (less than 2 days!) and painless transaction. RECOMENDED!
Keith
Hmmmm 80% of Price Guide might be a good selling price for certain coins!
<< <i>
<< <i>Prime + 400 bps. The link is provided above. >>
Yow. I can get a cash advance off my USAA AMEX at prime -- currently 5%, and it's unsecured. Plus, if I have the advance dumped directly into my USAA bank account, there is no cash advance fee. >>
I'll echo what Sanction II said. This is a great business for the lender. You effectively own a 1 year call option on a group of coins at a 20% haircut + 9% per year.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>Instead of selling few of my best coins I decide to talk with Mr Mike Lewis at PCGS . I got a line of credit of about 80% of the price guide for my PCGS coins.
I have to say that it was a quick (less than 2 days!) and painless transaction. RECOMENDED!
Keith
Which price guide?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I suspect that the lender makes the loans on the condition that physical possession of the coins is given by the borrower to the lender until the loan is repaid [makes sense]. On default the lender would then follow applicable rules [Calif. law I suspect since PCGS is based in toney Newport Beach on the lovely and sunny So. Orange County Coast] and foreclose upon the collateral [the coins] through either a public sale or private sale as authorized by Article 9 of the California Commercial Code. Who knows what price the coins would bring at a foreclosure sale, but I suspect that they would probably bring less than the amount of the unpaid loan [unless the LTV ratio when the loan was made is 50% or less; i.e. $50,000.00 loan with coins valued at $100,000.00 or more (with the value being 80% of the applicable price guide value)].
Forced sales of coins given as collateral for loans would be a very interesting area to get involved in, particularly if the sales were public auction sales [similar to real estate loan, non judicial foreclosure sales in California]. If much of this activity took place, I could see deep pocketed collectors becoming bidders at forced sales of coins given as collateral for loans. Lots of wheeling and dealing, with round robin and other such machinations taking place between bidders all striving to be the high bidder [but not two high] on a 1927D Saint or other such rarity.
Another question would be whether the borrower would be liable for any deficiency remaining after the proceeds of the forced sale of the coins given as collateral are applied to the unpaid loan balance. Unlike consumer protections given by CCP 580 et. seq. and CCP 726 et. seq., I am aware of no social policy being present that would cause the California legislature to give antideficiency protections to persons who take out loans secured by coins.
I wonder if any company who has become involved in making "coin loans" [PCGS and/or Collateral Finance Corporation] have had any of their loans go bad? If so, I wonder how it has worked out for them in collecting the monies owed them under the defaulted loan(s)?
EDIT: Or better yet, LegalZoom. How come the ads never state that Robert Shapiro is the guy that got OJ off the hook? ( I hope Sanction or Longacre is not Handle or Shapiro in "real life")
this whole thing sounds like a numismatic slippery slope, one that a collector should stay far away from.
as per the link
KEY TERMS:
• Floating prime rate +4%
• Coins held by PCGS until loan is paid
• Minimum loan $10,000
• Maximum term of 1 year, no
pre-payment penalty
• Must be graded by PCGS before
funding
FOR VINTAGE COINS:
• Borrow at 75% of CCE
FOR BULLION COINS:
• Borrow at 80% of melt based on
PM Fix
©2008 Collectors Finance Corporation 814908
FOR MODERN COINS:
• Borrow at 65% of CDN
FOR CURRENCY:
• Borrow at 50% of Greensheet
Presidential review for an upgrade?
Just kidding, just kidding!
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>I wonder what would happen if the coin market tanked and values dropped by 50%-60%; and borrowers defaulted on the loans? >>
You'd see what happens where you could buy a lot of property in overheated housing markets in zero-down, adjustable rate mortgages once the bubble popped.
The big difference is that unlike houses, the vast majority of coins aren't financed.
<< <i>
<< <i>Instead of selling few of my best coins I decide to talk with Mr Mike Lewis at PCGS . I got a line of credit of about 80% of the price guide for my PCGS coins.
I have to say that it was a quick (less than 2 days!) and painless transaction. RECOMENDED!
Keith
Which price guide? >>
deleted
<< <i>I wonder what would happen if the coin market tanked and values dropped by 50%-60%; and borrowers defaulted on the loans?
I suspect that the lender makes the loans on the condition that physical possession of the coins is given by the borrower to the lender until the loan is repaid [makes sense]. On default the lender would then follow applicable rules [Calif. law I suspect since PCGS is based in toney Newport Beach on the lovely and sunny So. Orange County Coast] and foreclose upon the collateral [the coins] through either a public sale or private sale as authorized by Article 9 of the California Commercial Code. Who knows what price the coins would bring at a foreclosure sale, but I suspect that they would probably bring less than the amount of the unpaid loan [unless the LTV ratio when the loan was made is 50% or less; i.e. $50,000.00 loan with coins valued at $100,000.00 or more (with the value being 80% of the applicable price guide value)].
Forced sales of coins given as collateral for loans would be a very interesting area to get involved in, particularly if the sales were public auction sales [similar to real estate loan, non judicial foreclosure sales in California]. If much of this activity took place, I could see deep pocketed collectors becoming bidders at forced sales of coins given as collateral for loans. Lots of wheeling and dealing, with round robin and other such machinations taking place between bidders all striving to be the high bidder [but not two high] on a 1927D Saint or other such rarity.
Another question would be whether the borrower would be liable for any deficiency remaining after the proceeds of the forced sale of the coins given as collateral are applied to the unpaid loan balance. Unlike consumer protections given by CCP 580 et. seq. and CCP 726 et. seq., I am aware of no social policy being present that would cause the California legislature to give antideficiency protections to persons who take out loans secured by coins.
I wonder if any company who has become involved in making "coin loans" [PCGS and/or Collateral Finance Corporation] have had any of their loans go bad? If so, I wonder how it has worked out for them in collecting the monies owed them under the defaulted loan(s)? >>
I assume if the borrower defaulted that the lender would pursue legal remedy thru the courts. Just like being upside down on an auto loan the bank can repossess or you can surrender the vehicle. I believe the lender is not automatically granted the deficiency payment; they have to sue to get it. You shud take out a loan and repay it in 2 days just so you can tell us what all is involved.
Finally, a reliable guide for the value of high-grade bullion.
"Keep your malarkey filter in good operating order" -Walter Breen
<< <i>Is it a pre-requisite to have had a Business strike Lincoln Cent grade out at MS-70 in order to be approved? >>
Actually I sent few old ugly pennies,including a chain cent XF40...
Keith
No Freaking way I would be in hock to the home team to the tune of over a grand a month. Dats not gonna happen.
all of the things in the advertisement are basically borrowing on coins to buy more coins.
For both dealers and collectors, seems it would make more sense to sell excess inventory or collection.
In a severe market correction (remember PCGS common MS65 Morgans fell from $600 to $60 around 1990)
you could lose your coins in a default and still owe most of the loan amount.
<< <i>
BTW, I can understand a dealer using inventory as security for a business line of credit. However, for a collector I do not understand why one would want to borrow money and provide the lender with your coins as collateral. >>
I can't even understand why a dealer would do it since PCGS takes physical possession of the coins. Why would a dealer want his inventory tied up like that, unless it's for coins he doesn't have any intention of selling for a long period of time.
My icon IS my coin. It is a gem 1949 FBL Franklin.
<< <i>
<< <i>Prime + 400 bps. The link is provided above. >>
Yow. I can get a cash advance off my USAA AMEX at prime -- currently 5%, and it's unsecured. Plus, if I have the advance dumped directly into my USAA bank account, there is no cash advance fee. >>
My Chase credit card will give me 0% for 6 months with a 3% fee at a max of $199. So if I take $10k for 6 months, I pay 4% (annualized). Good deal, but I despise CC debt and don't carry any.
My icon IS my coin. It is a gem 1949 FBL Franklin.
<< <i> What happens if the borrower gets upside down?
Presidential review for an upgrade?
Just kidding, just kidding! >>
That one almost slipped by me... but I could see it now...
Pres: This coin WILL NOT upgrade period.
Pres Asst: But boss, the coins owner owes us $ X,XXX,XXX.00 !
Pres: Lemme see that sucker again.... hmmm.... if you tilt it just this way and dim that light over there.... Yeah, just as a thought... This coin needs to be upgraded from a 63 to a 65....
Satirical Disclaimer: The above is purely satire and meant as a joke.... Don't Bam me please
Interesting. I didn't consider the flipside. Consider if you have a pop one whatever pledged as collateral, along with other things. Then PCGS grades another dozen of the pop one, sending its value 80% lower. There's a margin call, and possibly a fire sale of all of the items. Imagine the claims the borrower could make in a lawsuit.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>That 80% of value loan only covers bullion coins ... much lower loan to value for other graded coins..... >>
And.......................its only 80% of "Melt" value!
The name is LEE!
<< <i> Some interesting issues can come up when a lender has the ability to either impair or to enhance the value of collateral used to secure payment of a loan.
Interesting. I didn't consider the flipside. Consider if you have a pop one whatever pledged as collateral, along with other things. Then PCGS grades another dozen of the pop one, sending its value 80% lower. There's a margin call, and possibly a fire sale of all of the items. Imagine the claims the borrower could make in a lawsuit. >>
Very interesting indeed!
Keith
If I needed fast cash, I'd be sending some gold and silver in for trading. Now on the same token, my credit card company charges me 12% on purchases and is offering 1.99% and .99% on balance transfers, respectively. I try not to carry any balance, but I admit I am far from debt free. I could be if I sold a few of my coins on loan.
I think this loan business is rather interesting. A pawn broker will NEVER give 80% of a price guide value...so what PCGS is offering is an opportunity to get your coins back. If I wanted to buy back every coin I sold , it would cost me a lot more than it sold for. About 100% more.
I will take one coin as an example.
A proof 70 $25 Platinum coin from 2005 is valued in the price guide at $3150.
80% of that is about $2500. If I obtained a loan off of that coin for $2500 and I bought it for $435 from the mint, had it graded for $25 ... What's the big deal ? If it doesn't sell on eBay at full retail and PCGS offers me 80% of what it assigns the value at, I'm 2 grand ahead.
Seems to me it's a fantastic service during tough economic times. But then, I'm far from the brightest bulb in the socket.
``https://ebay.us/m/KxolR5
A proof 70 $25 Platinum coin from 2005 is valued in the price guide at $3150.
80% of that is about $2500. If I obtained a loan off of that coin for $2500 and I bought it for $435 from the mint, had it graded for $25 ... What's the big deal ? If it doesn't sell on eBay at full retail and PCGS offers me 80% of what it assigns the value at, I'm 2 grand ahead. --
Except PCGS will loan only 80% of the melt value of "bullion coins." Read the fine print, Joe, and a couple of the preceding posts.
<< <i>-- I will take one coin as an example.
A proof 70 $25 Platinum coin from 2005 is valued in the price guide at $3150.
80% of that is about $2500. If I obtained a loan off of that coin for $2500 and I bought it for $435 from the mint, had it graded for $25 ... What's the big deal ? If it doesn't sell on eBay at full retail and PCGS offers me 80% of what it assigns the value at, I'm 2 grand ahead. --
Except PCGS will loan only 80% of the melt value of "bullion coins." Read the fine print, Joe, and a couple of the preceding posts. >>
Thank you
Thankfully I hate borrowing
``https://ebay.us/m/KxolR5
<< <i>-- I will take one coin as an example.
A proof 70 $25 Platinum coin from 2005 is valued in the price guide at $3150.
80% of that is about $2500. If I obtained a loan off of that coin for $2500 and I bought it for $435 from the mint, had it graded for $25 ... What's the big deal ? If it doesn't sell on eBay at full retail and PCGS offers me 80% of what it assigns the value at, I'm 2 grand ahead. --
Except PCGS will loan only 80% of the melt value of "bullion coins." Read the fine print, Joe, and a couple of the preceding posts. >>
Funny. they super-hype bullion to get people to submit to them saying they are akin to "rare collector coins that are condition rarities!". But you see how little they actually think of them, slabbed or not, as they are only willing to pony up 80% of BULLION value, not 80% of PRICE GUIDE value that they market to the masses.
Should tell collectors something right there when the biggest marketer of the product, doesn't believe in the long-term value of the product they are marketing.