The ripple effect of the NFL lockout

The potential of a NFL lockout is causing ripple effects in more areas than I believe most people realize.

Credit markets

I received a text from one of my veteran clients last night that his bank, US Bank, is not going to going to go through with his 15 year fixed loan @ 4.25% on his new primary residence. My client has another year left on his contract, makes good money, has an abundance of liquid savings and has solid credit. The loan is for less than $300,000. My client could easily buy the home all cash if he so desires.

Instead, US Bank proposed an in house portfolio loan on a 5 year ARM @4.25% and said they can't do the 15 year fixed "because of the lockout" (their exact quote). When I called the mortgage rep named Cynthia at US Bank to get a detailed explanation, she told me that; "her underwriters said Fannie May or Freddie Mac won't underwrite any NFL players because of the impending lockout. However, the bank is willing to do so in house, but only for a 5/1 adjustable rate loan." She also added that she wasn't even sure what an NFL lockout meant.

Another one of my veteran clients, worth well over several million dollars, had similar resistance from another bank on a residential refinance. The lockout was also referenced to him as the reasoning why the loan may be “challenging" to close.

The 2011 draft class

I represent 4 members of this draft class and they really don't have a full grasp of how they may be affected just yet. Just like all the young men who are preparing diligently for the Combine and their respective pro days, they just want an opportunity to show their wares, increase their stock and get drafted. Recent talk of boycotting the combine and their pro days were absolutely shocking to them. In chats with other agents, their clients felt the same way.

Long term rehab & care

I estimate that there are about 100 (at least 3 per team) or more NFL players who are rehabbing injuries that were sustained 2010. These players usually follow strict rehab scripts under the watchful eye of team trainers and doctors. However, come March 4th, players will have to find their own resources for ongoing rehab, medical care and conditioning. Many teams are helping players by making arrangements with independent clinics and specialists to continue the rehab, but the responsibility to see it through will fall solely on the player to do so. When I asked one of my clients who just had surgery a few weeks ago on his foot," where will you rehab in the event of a lockout?" His reply was, "I have no idea". As we know, diligently rehabbing could be a challenge for some and in the event of a prolonged lockout, we may see more lingering injuries than usual when the 2012 season rolls around.

A lot of the burden of preparing all players for the potential lockout will fall on the agent community. Proactive agents are helping their clients find offseason workout facilities, rehab options and constantly reminding them to save their money and live way below their means. Those veterans and rookies who go rudderless without proper guidance through a long lockout may have several financial and even physical problems. If so, one thing for is certain, NFL fans will show little or no sympathy for them.

Follow me on Twitter: @jackbechta

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