General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsMeet the newest fraudulent sub-prime market: car loans
This market is EXACTLY the same game as the sub-prime housing fraud.
The explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nations biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.
And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds a process that creates ever-greater demand for loans.
another bubble being created.
KamaAina
(78,249 posts)yeoman6987
(14,449 posts)That folks fall for another trick. Read the fine print and especially see what the interest rate is. Also you don't need the latest anything. Focus on reliable. Will folks ever learn?
dixiegrrrrl
(60,010 posts)that the buyers are not aware of their loan papers being filled out with bogus info.
They are just told by the car salesman that they can get the car, payments so much a month, etc.
And the loan is packed up and sent along to the bank, which is happy to back it, becuase the bank can sell it as part of a bond offering.
What is going to be interesting is if the buyers of the bond are going to be more careful, consdiering they had losses from the mortgage bond fraud.
Car sales man doesn't care, he has his commission.
Bank doesn't care, they have their fee for passing along the loan.
Bond sellers don't care, they have their commission on the bond sales.
If the car payments stop, the dealer will re-possess the car and sell it all over again.
Rinse and repeat.
badtoworse
(5,957 posts)Best to wait on buying a new car.