Originally Posted By: walt4dun
I guess Im not understanding what the fuss is about.

I can certainly understand the lender's point of view.

Example
100k property w/ 50k of timber value.

20% down = 20k
Loan = 80k

You clear cut it & don't apply the proceeds to the principal.
Property's market value is 50k.

Bank is upside down on their collateral.
You are 30k in the black if you walk away.


Your scenario describes one of the risks of lending. It's part of the deal and their responsibility to underwrite risks appropriately. The "fuss" for me is that I do not want a lender to tell me what I can or can not do with my property because someone "might" clearcut a property and walk. Yes, I could cut the timber and reduce the overall value, but a tornado could do the exact same thing. Are these lenders requiring crop insurance on the timber? I doubt it.

Look, everybody is certainly free to choose who they do business with. I prefer to do business with lenders that do not put any requirements on my timber. Why anyone would choose a lender that does is beyond me.