Special Report

Participants' Expectations Point the Way to the Future of Subprime Auto

MAY 2019

A new report from Credit Chronometer identifies differences in expectations that could lead to disruption in the securitization market and ultimately impact auto lending to consumers. The report provides a rare glimpse into perceptions and expectations of various groups across the market, which will help individual participants set their own expectations and stay ahead of market shifts. 

Preview the report highlights to learn more and download a copy of the full report. 

Student Loans

Something iiBIG Just Happened: 11th Annual Education Finance & Loan Symposium

May 16, 2019 | By JOSEPH CIOFFI

Last week, Joseph Cioffi moderated a panel on valuation and trends in student loan securitizations at the iiBig 11th Annual Education Finance & Loan Symposium. Below, he provides key takeaways from the conference and shares insights from his fellow panelists: Grant Carwile, Managing Director at SL Capital Strategies LLC Jonathan Riber, Senior Vice President, U.S. ABS at DBRS Melvin Zhou, Director, ABS Consumer at Kroll Bond Rating Agency As the panel discussed at the conference, two of the best ...

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Student Loans

Watch Out for Madden v. Midland Risks in Education Lending

May 03, 2019 | By JOSEPH CIOFFI

Success stories of marketplace lending in consumer credit markets are plentiful. They provide models of success for lenders seeking to leverage technology to reach underserved markets, but along with the successes, there is a significant legal issue that has impacted marketplace lending of which student loan lenders and investors should be aware. We’ve written about Madden v. Midland Funding (Madden) risks in prior blogs and articles in connection with marketplace lending. A recent settlement ...

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Student Loans

Behind-the-Scenes Strategies for Success – Part Two: We Speak to Revenue Connections on the Importance of Borrower Attributes to Student Loan Collections

Apr 17, 2019 | By JOSEPH CIOFFI

Take care of your business at home, before searching for greener pastures. It’s a key takeaway from Part One of our interview regarding subprime auto: lenders and servicers with modernized collection and recovery systems have a solid foundation for profitability that should be a requisite before embarking on business development plans. In Part Two of our discussion with David Albers, CEO of Revenue Connections, we asked David to share his advice on ways to positively impact collection efforts ...

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Auto Loans

Behind-the-Scenes Strategies for Success: We Speak to Revenue Connections on Improving Collections to Combat Latent Market Risks

Apr 11, 2019 | By JOSEPH CIOFFI

Sometimes, it’s what you can’t see that matters most. First, the bad news: after years of economic growth and generally good times, consumers’ credit scores may be inflated. Like 50 is the new 40, a prime score today may be the equivalent of a sub-prime score pre-financial crisis. If you believe a leopard doesn’t change its spots, a high credit score may be masking a borrower’s likelihood to default in bad times, and the risk on subprime loans is bigger than believed at origination. Now, the ...

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Auto Loans

Following the Backup Plan – Part Two: We Talk to CAR Financial Services on the Keys to Successfully Engaging a Backup Servicer

Mar 29, 2019 | By JOSEPH CIOFFI

This is part two of our interview with the executive team at CAR Financial Services, a subprime auto finance company with over 25 years of experience providing customized backup and successor servicing. In part one of our interview, we discussed the benefits of having a backup servicer in place before trouble starts. But once you decide to take the prudent course and engage a backup servicer, how do you know you are getting the best value from the relationship? Here, we discuss with CAR the ...

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Auto Loans

Part One: As Delinquencies Rise in Subprime Auto, We Explore a Protective Strategy with Backup Servicer, CAR Financial Services

Mar 22, 2019 | By JOSEPH CIOFFI

If subprime auto delinquencies continue to rise and the risks continue to grow, it will be cold comfort to those who saw it coming, if they haven’t taken protective measures. There’s no glory being on the wrong side of right. From this perspective, there is real value in any service that has the potential to help participants see ahead of the curve and mitigate risks. With this in mind, we spoke to Justin Bannister, Director of Centralized Operations, and Oscar Lopez, Specialty Products ...

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Auto Loans

Subprime Auto: The Truth Is Out There

Feb 28, 2019 | By JOSEPH CIOFFI

Red and blue is the new black and white, but the country could use a lot more purple. Seems few can take a position publicly these days unless it’s extreme – whether it’s a political debate or the meaning of the New York Fed’s recent Quarterly Report on Household Debt and Credit showing an uptick in subprime auto delinquency. Intelligence includes the ability to see the other side’s point of view. The truth is out there – and it can be found in the gray area between the absolutists. There Are ...

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Auto Loans

How Subprime Auto Participants Can Avoid the Hell of a Future Unseen

Feb 14, 2019 | By JOSEPH CIOFFI

If you want to know the truth, no one can really predict the future of any market by themselves; everyone is limited by data and perceptions. Without shared knowledge and experience, the future remains a puzzle only time can solve. Where there is limited information, J.D. Salinger’s prediction is inevitable: “the fact is always obvious much too late.” But in subprime auto ABS, we don’t have to succumb to Salinger’s fatalism. By taking the pulse of all types of industry participants – lenders, ...

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