Slimy bastards, same game different market, instead of home mortgages they go after auto loans.
Auto Loans: A Subprime Market Grows in the Shadows
By Matt Robinson, Sarah Mulholland, and Jody Shenn October 02, 2014
The housing crisis laid bare an epidemic of fraud and sloppy paperwork on loans made to home buyers with spotty credit. Investors who purchased bonds backed by those loans suffered drastic losses.
Six years later, investors are snapping up a new crop of subprime bonds, this one backed by auto loans. Ratings companies are awarding the bonds top grades, and buyers have almost no way to determine the accuracy of the information they get about them. “Investors are basically taking the issuer’s word that they follow certain procedures,” says Eugene Grinberg, a former analyst who structured subprime auto asset-backed securities and now runs his own software company. “There is opportunity for fraud.”
Wall Street sold $17.7 billion of the bonds this year through Sept. 26, a pace that would make 2014 the busiest year since 2006, according to Barclays (BCS). Subprime auto payments more than 60 days late climbed to 3.6 percent of the debt outstanding in July, from 3 percent the year before, Standard & Poor’s (MHFI) said in a Sept. 18 report. Issuers include the finance arm of General Motors (GM); Exeter, which is owned by private equity firm Blackstone; and CarFinance, which has backing from investment firm Perella Weinberg. Spokeswomen for GM, Exeter, and CarFinance declined to comment.
more:
http://www.businessweek.com/articles/2014-10-02/auto-loans-a-subprime-market-grows-in-the-shadows
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