New U.S. Subprime Boom, Same Old Sins: Auto Defaults Are Soaring

By artappraiser on Tue, 07/18/2017 - 2:18am |

By Gabrielle Coppola @ Bloomberg News, July 17 (with video)

Santander-Chrysler venture opens window into race to bottom
Wall Street’s insatiable debt machine fuels lax underwriting

It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud.

Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017.

A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide.

Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis. But since the Great Recession, business has exploded [....]

URL:

https://www.bloomberg.com/news/articles/2017-07-17/new-u-s-subprime-boom-same-old-sins-auto-defaults-are-soaring