Subprime Auto Loans: 6.6 Mn Borrowers In 2012, 18% Increase From 2011

April 4, 2013 3:18 pm

Wear your seat belts. Subprime Reloaded is here. We spotted this stat today, that there has been a surge in subprime auto loans across the US. 6.6 million borrowers took out subprime auto loans from car dealers in 2012, an 18% increase from the prior year. And who is funding these loans? Listen to this: “These loans are being bundled, sliced and sold to yield-hungry fixed-income investors: so far this year, lenders have sold $5.7 billion in securities backed by subprime auto loans, up 13% over the same period in 2012.” (Source)

Sounds familiar? We are not saying that the next step would be to make some derivatives out of these securities backed by subprime auto loans. We are also not saying that you can use a particular three letter acronym starting with C and ending with O to represent these derivatives.

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