Spot Delivery Law and Mortgages

Part I

Relevant Facts

The facts that are relevant to Benner’s spot delivery claim are (Session 6: Buying a Car):

1) On January 13, 2016, Plaintiff bought a 2012 Chrysler 300 (“the vehicle”) from Defendant

2) When Plaintiff bought the vehicle, she signed a retail purchase agreement and a retail installment sale contract. See Exhibit 1, “Contract.”

3) According to the contract, the Plaintiff agreed to a total sale price of $29.860.80. 10. Of the $29,860.80, $300.00 was a dealer processing charge.

4) The interest rate on the contract was 23.25 percent.

5) On January 13, 2016, Defendant told Plaintiff that Americredit Financial Services Inc. (“Americredit”) would be financing her vehicle.

6) As part of the retail installment sale contract Defendant assigned his interest in the vehicle to Americredit.

7) That same day, Plaintiff and Defendant signed an “Agreement to Provide Insurance” that indicated that Americredit required
the Plaintiff to obtain insurance for her vehicle and to show Americredit proof of insurance.

8) On January 13, 2016, Plaintiff paid $1,000.00 as part of her down payment on the vehicle.

9) On February 12, 2016, the vehicle was titled under Plaintiffs name and on the title Americredit was identified as the secured party. Exhibit 2.

10) On March 17, 2016. Defendant contacted the Plaintiff by phone notifying Plaintiff that Plaintiff needed to return the vehicle because Defendant was unable to obtain financing.

These facts clearly show that the plaintiff had the vehicle for more than 4 days, which is all that is allowed to the dealer to find financing. In this case, the dealer went for more than 2 months before trying to cancel the deal. At that point, the deal was already well in place and could not be canceled according to spot delivery law. The dealer violated the contract in trying to take back the car. The dealer gave the buyer the impression that Americredit was the financier and that impression lasted well beyond the initial four days—and yet as the plaintiff makes clear in the previous facts, the contract was signed on January 13 and title was given on February 12 and it was not until March 17 that the dealer requested the car back saying it was unable to find financing. The dealer was beyond the four days required by law and thus was not in a position to request the car back. That is why all of these facts are relevant.

Non-Relevant Facts

Non-relevant facts include all the payments that were made and all the facts about the inconvenience that the plaintiff suffered as a result of the dealer’s deceptive practices and attempts to skirt the law. These are included in the argument because they add color to the suit and provide examples of how the plaintiff under every step of the way was under the impression that financing had been obtained and that the dealer was being deceptive. The payments that were made as stated in the argument show that the plaintiff believed she was making down payments to the dealer and paying for financing. The underhanded way in which the dealer attempted to communicate with the plaintiff well after the initial four days had expired shows that the dealer was trying to get the car back in a way that was not above board.

While these facts are helpful to showing the type of character of the dealer, according to the law all that is really needed to know is that the contract was signed in early January and that the dealer did not attempt to get the car back or cancel the deal until mid-March—two months after the contract was signed.

Part II

There is a way to balance the two competing interests of lenders and borrowers, and that is for consumer rights should be such that they do not ban foreclosure but that lenders should have restrictions on lowering their standards so that they can issue sub-prime mortgages. The more risky and borrower’s credit is, the harder it should be for that person to get a loan. The idea that low-income borrowers have a right to obtain a mortgage is nonsensical because it puts lenders at risk because of a politically correct ideology that stipulates that everyone should be able to have a home. The fact of the matter is that not everyone should have a home: those who cannot afford it should not have access to credit markets.

Credit markets should be for those who can afford to take out big loans with the reasonable expectation being that they will be able to pay them back. As the 2008 home crisis showed, when lenders do too many subprime mortgages, the risk goes up—and that can be a moral hazard for an entire firm. As Fannie Mae and Freddie Mac and Lehman and Bear Stearns and AIG and so many other players in the mortgage industry and ratings industry and insurance industry all demonstrated—when lenders lower their standards, the endpoint crash is inevitable.

References

Session 6: Buying a Car. Session 6 Materials.