RECENT NEWS
Wall Street Journal  Apr 24  Comment 
The federal Parent Plus loan program has millions of borrowers, many with subprime credit ratings. Its default rate exceeds the rate for U.S. mortgages at the peak of the housing crisis, and the debt is almost impossible to extinguish through...
New York Times  Apr 20  Comment 
The Consumer Financial Protection Bureau and mortgage regulators from 22 states are moving to limit the operations of Ocwen Financial, which settled a similar set of charges in 2013.
Forbes  Apr 20  Comment 
On Thursday, the Consumer Financial Protection Bureau sued Ocwen, currently the largest servicer of subprime home mortgages in the United States, for "failing borrowers at every stage of the mortgage servicing process."
Clusterstock  Apr 15  Comment 
In late 2012, Kathleen Boluch needed a new car — a drunk driver had left hers totaled — but she knew it wouldn't be easy to get. Boluch, who lives in Massachusetts, was freelancing and wasn't making much money. She didn't have much in...
Benzinga  Apr 13  Comment 
The deterioration in U.S. auto credit is expected to continue in 2017, Fitch Ratings said in a report released in early April. Specifically, the firm sees auto asset-backed securities portfolios at risk. With subprime loan saga rearing its...
New York Times  Apr 10  Comment 
Navient is accused of making billions of dollars in risky, subprime student loans to borrowers who have little hope of repaying them. Here are some of those borrowers’ stories.
MarketWatch  Apr 6  Comment 
U.S. auto credit will deteriorate even more in 2017, leaving particularly vulnerable the specialized debt known as asset-backed securities created from subprime, or the lowest-credit-rated, loans, Fitch Ratings said in a Thursday report that...
MarketWatch  Apr 6  Comment 
Elevate Inc. said it expects a $6.50 issue price Thursday morning and increased the number of shares it would offer, after previously setting a range of $12 to $14.
MarketWatch  Apr 3  Comment 
Elevate Credit Inc. is back to test the public markets again in a climate that may be more welcoming to financial lenders.
Benzinga  Apr 2  Comment 
Everyone is worried about the subprime auto market, including Neuberger Berman Group Fund Manager Steve Eisman. “Banks make mistakes on credit quality, and we are in an environment where credit quality has never been this good in anyone’s...




 

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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