RECENT NEWS
MarketWatch  3 hrs ago  Comment 
Auto loan and lease credit performance will continue to deteriorate in 2017, led by the vulnerable subprime sector, Fitch Ratings said in a report released Wednesday.
Clusterstock  7 hrs ago  Comment 
The auto loan market is showing signs of stress. US auto loan and lease credit loss rates weakened in the second half of 2016, according to a new report from Fitch Ratings, which said they will continue to deteriorate. "Subprime credit losses...
Benzinga  Mar 22  Comment 
The latest numbers from Black Book (BB) seem to confirm that the U.S. auto market has peaked. BB just launched its brand new BB Used Vehicle Retention Index (UVRI), which indicates that used car prices declined by 6.0 percent in 2016. So far in...
Clusterstock  Mar 15  Comment 
Losses on subprime auto loans have spiked in the last few months, according to Mizuho. That could spell bad news for US carmakers, consumers, and the economy. The number of Americans who have stopped paying their car loans appears to be...
Forbes  Feb 23  Comment 
Could the type of risk that triggered the sub-prime mortgage crash and the global financial crisis be missed again? A new report suggests it could, not because of unpredictable 'black swan' scenarios but because of short, even blinkered, time...
Benzinga  Feb 17  Comment 
Credit Acceptance Corp. (NASDAQ: CACC) shares are down more than 5.1 percent on Friday after Bloomberg reported that the Federal Trade Commission has requested information from the company regarding its use of ignition kill switches and GPS...
guardian.co.uk  Feb 10  Comment 
Analysts fear the boom in personal contract plans are mirroring the sub-prime mortgage scandal and are fuelling a colossal build-up of debt in UK and US A huge increase in the amounts borrowed by already indebted households in Britain and the US...
New York Times  Jan 20  Comment 
The largest U.S. collector of student loan payments is accused of engaging in the sloppiness and misleading tactics seen in the subprime market.
Financial Times  Jan 14  Comment 
Deal with DoJ resolves allegations the company misled investors
Forbes  Jan 11  Comment 
Pixabay Property Assessed Clean Energy loans, known as PACE, are the fastest-growingtype of financing in the U.S. lending industry, and as the market grows it's beginning to resemble subprimes just before they crashed. PACE loans have raised...




 

What happened blaicasly was because of assuming that a trend was permanent. In the financial world, this is a form of mental disorder. Trends are why anyone could be a day-trader and make money, for a while. Their impermanence is why anyone that didn't get out of that in time lost their shirts. The subprime loans were designed to churn the loans. You had loans that were fixed for usually two years, then would become variable. The whole intent was for the borrower to refinance in two years, again generating all of the bank's new-loan fees. The trend for real estate to appreciate rapidly was counted on to continue to keep this attractive for the borrower. Borrow 100 with 5k in costs to pay off a loan of 95, wait two years, borrow 105k with 5k in costs to pay off a loan of 100, wait two years, borrow 110k with 5k in costs to pay off a loan of 105 but then the trend didn't cooperate by giving a home value of 110k, and the balloon broke. People still had the same house they did, but now a loan for more than they originally paid for it, and they can't get refinancing, and can't sell it for what they owe. Trends are temporary. People that think otherwise will eventually lose money. Now, how do you know when a trend is coming to an end? There's a story about the Crash of '29 about a broker who was getting a shoe shine, and the shoe shiner gave him a hot tip on a stock. He realized that when shoe shine boys were giving stock tips, the market was about to crash and he got out. During the day-trader era, there were stories about bus drivers and janitors making huge money in day-trading, just before that went south. How many times have YOU seen people offering to help people get loans in their answers right here on Yahoo, offers totally unconnected to the question being asked? It was a trend. Now it's not.

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