The first three observations appear to be statements of the obvious and/or inferences that are speculative in nature. The last observation is based upon data comparing cumulative default rates by origination-year cohort for five- and six-year loans, with “default” being defined as 90 or more days past due or having a major derogatory event such as a repossession. Notably, the report states that “[t]he higher default rates observed for six-year loans should not be interpreted as a causal relationship” since “riskier borrowers” may prefer longer-term loans. Nevertheless, the report concludes that the absence of a decline in the default rates for six-year loans as they have become more widely used “suggests that the movement toward these longer-term loans may increase the likelihood of borrower default, potentially posing greater risks to both borrowers and lenders.” … [Read more...] about CFPB Report On Growth In Longer-Term “Auto Loans” Could Presage Increased CFPB Scrutiny
The rise in delinquencies is now being felt in the auto industry. GM and Ford both set aside more for credit losses in the first half of 2016 than during the same period in 2015. Ford also acknowledged that rising delinquencies, along with other factors, would make the second half of 2016 more difficult for the company. In light of the other positive economic indicators, whether the subprime market continues on its current trajectory remains to be seen. … [Read more...] about Could Rise in Auto Loan Delinquencies Signal Cooldown in Auto Industry?
It could also impact investors’ views of the companies making these loans. A recent report by UBS recommended limiting corporate debt exposure in “autos, auto lenders, rental car companies, credit card lenders, and non-bank providers of consumer loans and mortgages”. Wells Fargo similarly reduced its exposure to auto loans in early July. … [Read more...] about Sub-Prime Auto Loan Delinquencies Continue to Rise, but Experts Provide Divergent Views of Impact
Warren raised the issue in speeches this spring, Politico reports. “While the CFPB has oversight for mortgages and credit cards and checking accounts, it doesn’t have complete oversight of the auto loan market because Dodd-Frank specifically carved out auto dealers,” Warren said in a May 5 speech. … [Read more...] about Elizabeth Warren targets auto loans
Former Hoboken city councilman Christopher Campos, 39, faces bank and wire fraud and conspiracy charges in a criminal complaint. It alleges that Campos recruited at least a few straw buyers for the scheme, which took place in the New York City area in 2012 and 2013, and was present when false statements were made concerning some loan documents. … [Read more...] about Lawyer faces federal fraud case in claimed $7M straw-purchaser auto loan scheme