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Thu Feb 14, 2019, 09:53 AM

Subprime Arrives: Auto-Loan Delinquencies Spike to Great Recession Levels




Subprime Arrives: Auto-Loan Delinquencies Spike to Great Recession Levels
by Wolf Richter • Feb 12, 2019 •

“A development that is surprising during a strong economy and labor market”: New York Fed



Serious auto-loan delinquencies – loans that are 90 days or more past due – surged to 4.47% of total auto loan balances in Q4 2018, according to New York Fed data this morning. This put the auto-loan delinquency rate at the highest level since Q1 2012 and just 0.6 percentage points below the peak during the Great Recession in Q1 2011.



At the end of 2018, there were over 7 million Americans with auto loans that were 90+ days past due, 1 million more than at the end of 2010, at the peak of the overall delinquency rates, according to a separate report by the New York Fed. It added that “the substantial and growing number of distressed borrowers suggests that not all Americans have benefitted from the strong labor market.”

The dollars are big. Since the prior peak in Q2 2008, total auto loans and leases outstanding nearly doubled to $1.27 trillion (this is slightly higher than the data reported last week by the Federal Reserve Board of Governors as part of its consumer credit data). .............(more)

https://wolfstreet.com/2019/02/12/subprime-arrives-auto-loan-delinquencies-spike-to-great-recession-levels/




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Reply Subprime Arrives: Auto-Loan Delinquencies Spike to Great Recession Levels (Original post)
marmar Feb 2019 OP
elleng Feb 2019 #1
marmar Feb 2019 #2
Hotler Feb 2019 #3
progree Feb 2019 #4

Response to marmar (Original post)

Thu Feb 14, 2019, 11:22 AM

1. 'They're always 'surprised,' right?

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Response to elleng (Reply #1)

Thu Feb 14, 2019, 11:28 AM

2. Yep. Always "unexpectedly" with the financial analysis crowd.

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Response to marmar (Original post)

Fri Feb 15, 2019, 08:43 PM

3. Are they bundling bad auto loans and

giving them a good rating and selling the bundles? I think I've seen this type of game before.

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Response to Hotler (Reply #3)

Sat Feb 16, 2019, 12:33 AM

4. Yes, unfortunately

Google: securitized auto loans

and scroll down past the top half dozen, down to "Is the Auto Loan Securities Market Headed for a Crash?" and other ones like that.

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