5% down loans are baaaaaaaaaack….

[Coronita]

[quote=urbanrealtor]In response to the original post:

The fundamental problem with your argument here is that it supposes a basic lack of agency.

The previous run up had actual human beings consciously deciding to allow that run up.

I don’t think they perceived the possible outcomes but it didn’t just come like a bolt from the blue.

The housing markets is probably only second to the nuclear fuel market in terms of federal intervention.

The entire demand side of the debt market is run by congress and the entities it supports.

While down payment amounts may reduce (and they aren’t currently), there has been very little move to open up lending to NINJAs and liar loans. That level of poor risk management is what drove the previous bubble and I have not seen a lot of movement towards it. None in fact.

EG:
Last week, 3% conventional loan origination was discontinued.[/quote]

Ok, I hope then I’m completely wrong and banks won’t get us back into these ridiculous subprime loans products in the future again.

It sure seems to be happening elsewhere in the economy these days..

[svelte]

It all depends on who you want to quote, flu. You should know that.

See the glass as half empty if you want.

[quote=flu]
“General Motors has the highest auto loan delinquency rate in the industry due to its increasing reliance on subprime customers, a fact some experts fear could lead to a bubble like the one that wrecked the housing market in 2007 and produced the Great Recession of 2008.

At the same time, however, JD Power, one of the auto industry’s most respected forecasters, sees 2013 sales headed to 15.3 million units, the highest level in years.
[/quote]

http://www.autoblog.com/2012/08/28/auto-loan-delinquency-rates-at-historic-lows/

“One indicator of the status of our economy is the rate at which car owners are able to make payments, or rather, aren’t. The rate at which owners can’t get the check in the mail for their new car is called the delinquency rate, and according to a Los Angeles Times report, it has fallen to an all-time low.”

“Credit report entity TransUnion began tracking this data in 1999, which it calculates as the percentage of borrowers 60 or more days past due. Currently that rate was recorded at 0.33% for the second quarter of 2012 – down from 0.36% in the first quarter and a full 25% lower than last year.”

“We are at such a low delinquency level” said Peter Tureck, automotive vice president for TransUnion’s financial services business wing, “that a slight rise through the end of the year should be expected, though the overall rate will remain relatively low.”

[quote=flu]
While both Chrysler and GM use Ally Financial for their prime loans (which are issued to qualified buyers), GM has its own seperate sub-prime arm, known as GM Financial. In Q1 2012, some 93 percent of GM Financial’s loans were to sub-prime buyers, up from 87 percent in Q4 2010. During that same period, loans to the least qualified buyers – those with FICO scores under 540, were up 79 percent. GM Financial’s delinquent loans also rose by some $200 million in 2012, to $933 million – higher than Ford Toyota and Honda’s combined delinquencies.[/quote]

Spin, spin, spin!…they took GM’s *subprime* arm and compared it to Ford, Toyota, and Honda’s *overall* rate. Real fair reporting!

In actuality, Toyota’s Scion brand had a lower typical FICO score than GM’s Chevrolet (GM’s lowest number):

694 Mitsubishi
704 Suzuki
718 Dodge
721 Kia
723 Scion
726 Nissan
737 Chevrolet
737 Chrysler
737 RAM
741 Fiat

http://www.bankrate.com/financing/cars/car-loans-leases-getting-easier/

Look, I’ve shown you that delinquency rates were at an all-time low last year. Of course they are going to go up a bit!

[spdrun]

I suspect that delinquency rates are low because more people are driving older, paid-off cars. Average age of a car on US roads is the highest it’s ever been. Glad that Oh-bummer’s Cash for Clunkers didn’t really work in reducing that number!

http://money.cnn.com/2013/08/06/autos/age-of-cars/

[Coronita]

[quote=spdrun]I suspect that delinquency rates are low because more people are driving older, paid-off cars. Average age of a car on US roads is the highest it’s ever been. Glad that Oh-bummer’s Cash for Clunkers didn’t really work in reducing that number!

http://money.cnn.com/2013/08/06/autos/age-of-cars/%5B/quote%5D

My litmus test is my car detailer. It’s almost impossible to get him recently without 6 weeks advanced notice, starting about 4-5 months ago. I asked him what’s going on? He says, he’s been too busy… a lot of people with new cars. He’s kinda an older guy, and tells me I can’t believe who is financing these cars”….

[Coronita]

[quote=svelte]It all depends on who you want to quote, flu. You should know that.

See the glass as half empty if you want.

[/quote]

Look, I’m not suggesting other automakers are not guilty of this too, there were plenty of articles quoting people purchasing toyota doing subprime too.

My point wasn’t to exclusively bash GM/Chrysler. Just to show that subprime is back at least for autos. GM/Chrysler are two of such companies that restarted subprime lending after the likes of Ally was bailed out (more less)…Some of these auto companies afterwards even bought companies that exclusively do subprime lending. Mitsubishi almost went under a few years back because of subprime lending… And here we are again, with companies pushing for 84-96+month subprime loans again… If you want to deny that, and don’t think that’s not a problem..Well, ok…

I mean, it definitely was really ironic that when I was trying to rent on a condo down south, someone with a credit score of 500-550, a few judgments, a few tens of thousands in outstanding credit card debt (one being for a Victoria Secrets charge card to the tune of $15k outstanding)..still managed to pull up in a brand new spanking new Nissan Altima on a $40k salary….Don’t you think there’s a rat in this ?

It’s kinda ironic that on one hand people are complaining about how bad the economy for main street is. And on the other hand, people have means to be driving around brand new financed cars even when their credit is totally shot and their income and debt load would say otherwise….

Seriously, 96+month loans on a new car, and that doesn’t smell fishy?

[spdrun]

Might be specific to CA — the 2013 number is what it is nationally. I also live in the land of automotive comfortable shoes, utilivans, and taxicabs, so maybe I’m not seeing this 🙂

Same old crappy cars parked on my street as last year for the most part.

[The-Shoveler]

Actually I would be OK with Sub-prime-loan cars, except where the heck do they go after being repro’ed

I mean I expected to see them backing up with dealers having to buy extra parking space for them,

You know deals of a lifetime and all that after the 2009 crash.

[The-Shoveler]

Yea California is home of the posers,

I am looking forward to getting a used Tesla one day, there seems to be a lot more of them driving around L.A. than I expected to ever see.

Not that there is a lot of sub-prime Tesla’s out there I would imagine.

[The-Shoveler]

If there was such a thing as a California state human

it would be a poser.

[Coronita]

[quote=The-Shoveler]Actually I would be OK with Sub-prime-loan cars, except where the heck do they go after being repro’ed

I mean I expected to see them backing up with dealers having to buy extra parking space for them,

You know deals of a lifetime and all that after the 2009 crash.[/quote]

The deal of a lifetime was when gas prices initially shot up big time (then sticker shock of paying $4+/gallon)…

A lot of the V8’s weren’t moving at all.

[spdrun]

If there was such a thing as a California state human
it would be a poser.

But there will never be such a thing, maybe ten such things, since CA is about 10 states ranging from Wyoming to New York to Alabama all rolled into one.

[spdrun]

The deal of a lifetime was when gas prices initially shot up big time (then sticker shock of paying $4+/gallon)…

Wonder the following: if average gas prices hit $2.50/gal in the US, will we have a lot of good deals on Fiat 500s, Prii, and Jetta TDIs? (I happen to like small efficient cars for reasons other than gas mileage.)

I saw gas for about $2.85 when I was in NJ the other day. (Sadly, I take diesel which was about $3.50)

[Coronita]

[quote=spdrun]

The deal of a lifetime was when gas prices initially shot up big time (then sticker shock of paying $4+/gallon)…

Wonder the following: if average gas prices hit $2.50/gal in the US, will we have a lot of good deals on Fiat 500s, Prii, and Jetta TDIs? (I happen to like small efficient cars for reasons other than gas mileage.)

I saw gas for about $2.85 when I was in NJ the other day. (Sadly, I take diesel which was about $3.50)[/quote]

You probably can get a good deal on Jetta TDI’s at least the newer ones…. assuming they are still running…considering the high failure rate of the fuel pump grenading…

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