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Forbes  5 hrs ago  Comment 
Silicon Valley Lender Raises Nearly $50 Million for Subprime Credit Card Push
Clusterstock  Aug 25  Comment 
This story was delivered to BI Intelligence "Payments Briefing" subscribers. To learn more and subscribe, please click here. US-based alternative lender LendUp, a company focused on providing online- and mobile-based credit products to...
Clusterstock  Aug 16  Comment 
Subprime lending is making a comeback. TransUnion's Q2 2016 Industry Insights Report, released on Tuesday August 16, found that 10 million new consumers have entered the credit card marketplace in the last year, bringing the overall total...
Benzinga  Aug 15  Comment 
HBO’s John Oliver spent this week’s episode of “Last Week Tonight” discussing the rise of subprime auto loans and making comparisons to the subprime mortgage bubble. According to Oliver, nearly 25 percent of all auto loans are now...
Clusterstock  Aug 15  Comment 
The commercials are all over TV, the ones for car dealerships that will buy any car, even if you push it into their lot. And they'll sell you a car even if you're bankrupt or have a horrible credit score. That's all thanks to subprime auto...
Yahoo  Aug 5  Comment 
A federal appeals court rejected a one-time Florida billionaire's bid to revive his $800 million lawsuit accusing Citigroup of fraudulently hiding its exposure to subprime and other toxic mortgages.
Benzinga  Jul 29  Comment 
Some investors are wondering why the market is punishing Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) despite their solid quarters (GM’s EPS beat estimates by more than 20 percent). The answer just might that some headlines...
MarketWatch  Jul 27  Comment 
The auto-loan market has been called “stretched,” but it’s far from being the powder keg that the mortgage market was when the globe plunged into a financial crisis some eight years ago, loan and credit experts emphasized.
TechCrunch  Jul 26  Comment 
 With an IPO on the horizon, subprime lender Elevate will have an additional $545 million credit faculty to support its growing customers. Elevate’s niche right now is providing loans to borrowers with creditscores between 575 and 625. As the...




 

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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