What do you get when you add post-election uncertainty to pre-election “economic contradictions?” Many see trouble on the way, but after a period of mixed data and projections concerning interest rates, consumer spending and borrowing, and of course, election results, the months ahead promise to bring some clarity to subprime auto. Below is a review of recent performance and anticipated events on...
Davis+Gilbert’s Subprime Auto Loan Risk Chronometer has not signaled significant market risk for some time, but new litigation has commenced that is of the type that had been anticipated and may be an indication of what is to come if the labor market deteriorates further and contributes to weaker performance. In litigation recently filed in federal court in California, a group of noteholders in a...
In the subprime auto ABS market, losses have begun to appear in certain deals and there are signs of a downturn for the first time since the 1990s. Joseph Cioffi was quoted multiple times in the Structured Credit Investor article, “Skid Marks: Subprime Auto ABS Shows Sign of Pain,” commenting on how the decline has impacted investors and the future for the subprime auto sector.
“The market is resilient” was the mantra throughout the pandemic. Now that the Federal Reserve is at an inflection point on interest rate hikes and the pause on student loan payments is set to end after three years of relief, “the market is vulnerable” may be a more appropriate refrain. In fact, the cracks have started to show, particularly in subprime auto ABS.
Joseph Cioffi was interviewed for an Auto Remarketing podcast episode, "Talking Compliance and Risk with Davis+Gilbert Partner Joseph Cioffi."
Joseph Cioffi was quoted in an SCI article, "Lightning Rod?," regarding the CFPB's suit against subprime auto lender, Credit Acceptance Corporation.
For the past two years, the subprime auto market has defied expectations, but 2023 is off to a cold start. Normalization is on the horizon, but when we will get there and what it will look like when we do, remains unclear. What is normal in this moment is to ask whether the performance data is a sign of deeper trouble. And if so, will the structural protections in auto ABS continue to protect...
