RECENT NEWS
Wall Street Journal  6 hrs ago  Comment 
Lender Springleaf is nearing a deal to buy Citigroup’s OneMain for about $4.25 billion, a purchase that would create a new U.S. subprime giant.
MarketWatch  7 hrs ago  Comment 
Subprime lender Springleaf Holdings Inc. is nearing a deal to buy Citigroup Inc.’s OneMain Financial for about $4.25 billion, say people familiar with the matter.
New York Times  Mar 2  Comment 
Fearing increased risk and slipping standards, Wells Fargo will keep new subprime car loans to no more than 10 percent of its total auto loans.
New York Times  Feb 26  Comment 
The deal is expected to be one of the last major steps in the Justice Department’s push to make banks pay for their role in the subprime crisis.
Benzinga  Feb 23  Comment 
Ally Financial Inc's (NYSE: ALLY) improving results from its subprime auto lending sector will help chip away first-quarter consolidated net charge-offs, an analyst said Monday. The company's newly named Chief Executive Jeffrey J. Brown told...
Reuters  Feb 20  Comment 
Citigroup Inc is in advanced talks to sell its consumer finance unit OneMain Financial Holdings Inc to subprime lender Springleaf Holdings Inc for more than $4 billion, people...
Wall Street Journal  Feb 19  Comment 
Loans to consumers with low credit scores have reached the highest level since the start of the financial crisis, driven by a boom in car lending and a new crop of financial firms.
Financial Times  Feb 17  Comment 
Spectre of US subprime loan crisis hangs over asset class
New York Times  Feb 5  Comment 
The actions of a provider of fee-harvester cards, recently ordered to pay a civil penalty, highlights the big fees faced by those with low credit scores.
New York Times  Feb 4  Comment 
In the wake of the financial crisis, when rating agencies were blamed for feeding a subprime mortgage frenzy, Congress used the Dodd-Frank Act to adopt a battery of changes for the rating industry.




 

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.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki