Subprime lending

RECENT NEWS
Auto Loan Surge Fuels Fears Of Another Subprime Crisis
NPR  Jan 23  Comment 
Dealers are extending loans to a growing number of people with weak credit, and more of them are having trouble making payments. The situation is evoking comparisons to the subprime mortgage boom.
[$] T-Mobile to Tap Subprime Customers
Wall Street Journal  Jan 23  Comment 
T-Mobile will extend its best service offers, including financing plans for cellphones that can cost $650 or more, to any buyer who makes at least 12 payments in a row regardless of the person’s credit score.
Banks ignore subprime lessons at peril
The Australian  Jan 9  Comment 
THE saying that people who ignore lessons of history are bound to repeat it is a fair reflection on the mortgage broker scandal.
Taxi Lender Takes New Route
Wall Street Journal  Jan 8  Comment 
As Uber’s rise hits the price of a taxi medallion, Medallion Financial is expanding from its traditional loans to cabbies to finance subprime consumers buying boats and recreational vehicles.
Taxi Lender Steers New Course
Wall Street Journal  Jan 7  Comment 
As Uber’s rise hits the price of a taxi medallion, Medallion Financial is expanding from its traditional loans to cabbies to finance subprime consumers buying boats and recreational vehicles.
Subprime auto loans are up. Here's why that's not a crisis
CNNMoney.com  Jan 4  Comment 
Subprime auto loans have risen to the highest level since before the financial crisis.
Triple bubble and the mini subprime in energy complex
Commodity Online  Jan 1  Comment 
Subprime represents the nadir of and lsquo;risk-on and rsquo; fueled monetary euphoria. Spending that comes from money that does not exist. Why, when the next bubble bursts, they will need to step in even more.
DOJ targeting Morgan Stanley's relationship with subprime lender: NYT
Yahoo  Dec 30  Comment 
The U.S. Department of Justice is examining the relationship between Morgan Stanley and now-defunct New Century Financial Corp in the sale of subprime mortgages in the run-up to the financial crisis, New ...
Subprime Auto Loans Won't Wreck The Financial System
Clusterstock  Dec 26  Comment 
The word "subprime" sends chills down the spines of anyone who lost money during the financial crisis. A couple years ago, mortgage loans to subprime borrowers – those are the people with the worst credit scores – helped churn housing market...




more ▼WIKI ANALYSIS
 
TOP CONTRIBUTORS
Sr. Director
Sean Hinton
Director
Darv.Gosal
Director
Irvin Sha

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.

Retrieved from "http://bot.wikinvest.com/concept/Subprime_lending"
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