Are Subprime Auto Loans About to Implode?
Wells Fargo is one of the largest subprime auto lenders, according to the New York Times. Auto loan originations for the bank totaled $29.9 billion last year. Curiously though, they have decided to pull back from the industry.
According to the New York Times, Wells Fargo has been issuing subprime auto loans. Wells Fargo sees that the auto industry is about to go bust, and is pulling back to save themselves from the fallout.
And Wells Fargo is not the only auto lender issuing subprime loans. They paint a picture of auto loans, which reflects the subprime mortgage industry that led to the great recession. “Over all, auto loans to subprime borrowers — typically people with credit scores at or below 640 — have more than doubled since the financial crisis, with one in four new auto loans going to subprime borrowers.” Basically, Wells Fargo and other lenders have been giving auto loans to people who are not credit-worthy at an alarming rate since the recession. “Wall Street, meanwhile, has been bundling and selling such loans as securities to investors, reaping big profits while allowing millions of financially troubled borrowers to buy cars.” This has led to a bubble, and Wells Fargo senses that this bubble is close to popping, which is why they are getting far out of dodge. Does this sound familiar?!?
Just like with subprime mortgages, auto lenders are going to reap huge financial rewards while the everyday consumer and investor is left out to dry.
If you are caught in an auto loan with high interest or unmanageable payments, contact a debt settlement attorney. If your lender is threatening to repossess your car, call a debt settlement attorney. If your lender has already repossessed your car and is now trying to collect additional money from you, contact a debt settlement attorney. At every stage in the process, a debt settlement attorney is there to defend your rights, and fight to reduce your financial obligation and exposure to legal risk.
From the desk of Lead San Francisco debt attorney Alison Cordova: