“I suppose so.”
The bank president leaned back in his chair and hooked his thumbs into the shoulder openings of his vest. “Well, Mr. Kincaid, you are here, so, am I to take it that you have decided?”
“Yes, I have decided.”
“That’s good to hear. Tell me, what have you decided? Do you want to buy the loan?”
“Yes.”
“You are sure, now, that you want to do this?” Matthews asked. “I don’t want to be in the position of having you pushed into something that, upon further reflection, you regret.”
“I am positive I want to do it,” Kincaid answered. “And don’t worry, there will be no regrets.”
“I don’t have to tell you that we are talking about a lot of money here. The original loan was for twenty-five thousand dollars. With interest, the amount due now is considerably more.”
“I just want you to tell me again what happens if the borrower cannot make payment,” Kincaid said.
“You don’t have to worry about it. Mrs. Wellington has pledged Coventry on the Snake as collateral. That means there are more than significant assets against the note to cover the loan. If payment cannot be made, those assets will be forfeited to the mortgage holder.”
“Which will be me, if I purchase the loan right now. Is that right?”
“Yes, that would be you.”
“So if I make this investment, I will be protected?”
“Oh, indeed you will.”
“Do you think it is a good investment?” the bank customer asked.
“I think it is an excellent investment,” Matthews said, gushingly. “Why, back East, banks sell off loans all the time. It is perfectly safe—as I told you, if the loan goes into default, the assets will come to you. And of course, if the loan is paid on time, which I have every reason to believe that it will be, you will recoup every cent of your money, plus the interest that will have accrued between the time of your acquisition and the time of the settlement of the loan.”
“If you are sure the loan is going to be repaid, why are you willing to sell it?”
“We are a bank, Mr. Kincaid, and in order to function as a bank is supposed to function, it is necessary that we maintain a significant balance of funds. From time to time we get—well, to be honest—a little over-extended. When that happens, we can’t make any new loans. Selling this note will give us more flexibility in handling customers who require new loans.”
“All right, I want to buy the loan. How long will this transaction take?”
“Not very long at all,” Matthews said. “In fact, we can do it this very day. As soon as you make the payment, we can draw up the papers transferring the mortgage to you.”
“Exactly how much money will it take at this moment, to purchase the loan?”
“The initial loan was for twenty-five thousand dollars, but currently, with accrued interest, the amount due is twenty-eight thousand, five hundred seventeen dollars, and thirty-six cents,” Matthews said with the efficiency of one who was well at home with numbers, especially as it related to money.
“And you say that she has pledged the entire ranch against the loan?”
“Yes. Mrs. Wellington being a woman and all, our board of directors insisted upon more collateral than they would had the borrower been a man. As I am sure you are aware, the assets are easily worth twenty times the face value of the note.”
“Thank you,” Kincaid said. “I will draw a draft for immediate payment. Oh, and Mr. Matthews, if you would, please say nothing of this to anyone else.”
“You needn’t worry about that. Confidentiality is the policy of the Cattlemen’s Bank and Loan.”
“I appreciate that,” Kincaid said as he began filling out the draft.
“As a matter of fact, if you wish,” Matthews added as he watched the draft being written, “for a nominal fee, we will continue to process the loan for you. That way, as far as Mrs. Wellington is concerned, the bank is still the mortgage holder. For your purposes, that might be better.”
“How would it be better?”
“Well, say for example Mrs. Wellington finds out you hold the note instead of the bank. And suppose the borrower is unable to make the payment on time. It is much easier for the bank to turn down any request for extensions on the loan than it would be for you.”
“Yes, I can see what you are talking about. Good, good, let’s do it that way then.”
Finishing the draft, Kincaid held up the document and blew on it to dry the ink. He then passed it across the desk to Matthews. “I guess that makes me a member of the banking business,” he said with a broad smile.
Matthews accepted the check. “I guess it does at that,” he said with a satisfied smile. “I only wish that other businessmen were as astute as you are. If we could sell more of our loans, we would have more money available to service our customers when new loans are needed.”
Chapter Four
When Poke Terrell rode into King Hill a train was sitting at the depot. The engine, painted green and trimmed in red, was glistening in the golden light of the setting sun. The engineer was leaning through the window of the cab and holding a long-stemmed pipe clinched tightly between his teeth. He watched from his lordly position as arriving passengers left the train and departing passengers boarded.
