Subprime Borrowers Defaulting On Payments At A Higher Rate Than The 2008 Financial Crisis

Borrowers in the U.S. are defaulting on subprime auto loans at a higher rate than during the financial crisis, according to Fitch Ratings.

Lenders are responding by pulling back on financing to applicants with shaky credit histories and requiring higher standards for loans that they bundle and sell on to investors.

The delinquency rate for subprime auto loans more than 60 days past due reached the highest since 1996 at 5.8 percent, according to March data, the most recent available from Fitch. That compares with default rate of around 5 percent during the financial crisis in 2008.

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TheSteve - 5/16/2018 1:52:28 PM

+5 Boost

Just some fun facts:

After the subprime financial meltdown, the Feds (Obama administration) enacted new laws designed to preventing another similar meltdown.

Those laws were recently rescinded by the Feds (Trump administration) -- because... you know... deregulation -- thereby setting the stage to repeat another financial meltdown.

If another financial crisis hits, then I'm pretty sure "The Daffies" will blame it on Obama (or Hillary's email), and not the current administration's rescinding of laws that were intended to prevent a repeat of that financial fisco. Ya can't have it both ways, y'know :-/

valhallakey - 5/16/2018 11:55:30 PM

+4 Boost

Good point and 100s more like it out there, however I doubt most people follow these kinds of policy and rule changes. I found it strange that one of the first guidelines they rescinded was the one that required banks/investment advisors to ALSO look after their clients interest instead of always directing them to seriously risky investments that they would get big commissions on. After all these large retirement funds went broke and millions of retirees had to either go back to work or live in poverty why was that a controversial guideline? I guess because Obama did it??

TheSteve - 5/17/2018 1:41:17 AM

+3 Boost

@valhallakey: Correct. It's called a "fiduciary duty". Right from Google:
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A fiduciary duty is the highest standard of care. The person who has a fiduciary duty is called the fiduciary, and the person to whom he owes the duty, is typically referred to as the principal or the beneficiary. If an individual breaches the fiduciary duties, he or she would need to account for the ill-gotten profit.
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In other words, the previous administration felt financial institutions (including banks) owed a fiduciary duty to their clients, folks like you and me who invest our money there. That meant that under law, they had to have your interests at the forefront.

That law was rescinded by the current administration. They claim it's too restrictive. In a way, yes: It restricts financial institutions from screwing the common man in yet one more way, by doing stuff that's blatantly unethical, like the subprime ponzi scheme that threw the world into crisis.

Why on Earth would the current administration want banks and other financial institutions to have YOUR interests at heart? They're in the business of making profit, regardless of ethics, so screw you and the horse you rode in on.

Just some more facts to illuminate the state that regular Americans (AKA non-millionaires) are in today, thanks to the current administration :-/