"Instead of lending directly, the big banks enlisted large fleet owners and brokers —to use the banks’ money to lend to medallion buyers. In return, the owners and brokers received a cut of the monthly payments and sometimes an additional fee. At the market’s height, medallion buyers were typically earning about $5,000 a month and paying about $4,500 to their loans. The lenders got judgments that would allow them to take money from bank accounts. Some tried to get borrowers to give up homes or a relative’s assets. Others seized medallions and quickly resold them for profit, while still charging the original borrowers fees and extra interest. drivers lost everything. Most of the more than 950 owners who declared bankruptcy had to forfeit their medallions. Records indicate many were bought by hedge funds hoping for prices to rise. For now, cabs sit unused."
At www.nytimes.com
