RECENT NEWS
New York Times  Mar 16  Comment 
Despite rising delinquencies and repossessions, Santander Consumer USA had little trouble finding buyers for a $712 million bond deal containing many automobile loans to those with tarnished credit.
MarketWatch  Mar 13  Comment 
Auto loans remain a relatively small fraction of household debt when compared with mortgage debt, according to Amir Sufi, an economist at the University of Chicago.
Motley Fool  Mar 11  Comment 
With the mortgage crisis behind us, a new type of subprime lending has surged in popularity.
guardian.co.uk  Mar 5  Comment 
No car, no job means subprime loans are not necessarily a bad thing for borrowers among the working poor but excessive interest rates and unnecessary extras are Just as the exhaust fumes of the last subprime loan crisis are dispersing, chatter...
Yahoo  Mar 3  Comment 
Yahoo Finance's Midday Movers is live each weekday at 12pm ET, covering all the latest news on the markets, the economy and the biggest stories of the day.
MarketWatch  Mar 3  Comment 
The search for yield shows is still going strong, even with higher rates supposedly around the corner.
Wall Street Journal  Mar 3  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  Mar 2  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.




 

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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