Everything would be fine if the number of subprime borrowers not making their payments was extremely low
Uh oh – here we go again. Do you remember the subprime mortgage meltdown during the last financial crisis?
Well, now a similar thing is happening with auto loans. The auto industry has been doing better than many other areas of the economy in recent years, but this “mini-boom” was fueled in large part by customers with subprime credit. According to Equifax, an astounding 23.5 percent of all new auto loans were made to subprime borrowers in 2015. At this point, there is a total of somewhere around $200 billion in subprime auto loans floating around out there, and many of these loans have been “repackaged” and sold to investors. I know – all of this sounds a little too close for comfort to what happened with subprime mortgages the last time around. We never seem to learn from our mistakes, and a lot of investors are going to end up paying the price.
Everything would be fine if the number of subprime borrowers not making their payments was extremely low. And that was true for a while, but now delinquency rates and default rates are rising to levels that we haven’t seen since the last recession. The following comes from Time Magazine…
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9 comments:
No Bailouts at all - the taxpayers suffered the last time!
Make the lenders suffer - they screwed up!
Thanks for giving the people true and unbiased information.I am so glad i was raised by depression era parents who instilled in me and my siblings how to get by and not have to buy new and make due.
This is Obama's baby here,cash for clunkers was another plan to help bail out automakers while giving anyone who breathed a loan and this is the result.
3;12,those days maybe be here again soon!
GM is repeating history.
Sell more cars by financing anyone!
Too much house,too much car...
Alot of it also has to do with look at me syndrome induced by the media and other forms of communication.
This country was a lot better off when the telephone sat on the table or hung on the wall.
Most of this younger walking generation could be riding for the money there paying for a iphone.
You asked for it, you GOT IT,
TOYOTA!
These banksters have to eat their lunch this time, we taxpayers don't need to pay again!
If they bail out the banks again what do you think america will do, our nation has no unity, its why they got away with it last time. I havent met anyone that thought our tax money should have bailed out wall street bankers. Have you?
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