Posted on 07/20/2014 7:19:57 PM PDT by 2ndDivisionVet
Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan.
''I am not sure how I got the loan,'' Mr. Durham, age 60, said.
Mr. Durham's application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn't worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car.
This is the face of the new subprime boom. Mr. Durham is one of millions of Americans with shoddy credit who are easily obtaining auto loans from used-car dealers, including some who fabricate or ignore borrowers' abilities to repay. The loans often come with terms that take advantage of the most desperate, least financially sophisticated customers....
(Excerpt) Read more at cnbc.com ...
Actually, that has been around for a long time.
I leased my first nearly new car, a 1990 Audi Coupe Quattro, in 1992, right after grad school. It was a Certified, ex-lease car.
Best car I ever owned. Bought it at the end of the lease and drove it for 200,000 miles.
Now, I go through a car a year and try not to get too attached!
Why should it be anyone’s responsibility, other than the buyer’s, to determine if the buyer can afford the purchase (car, house, boat, etc.)?
How are things back in 1966? I miss that year. I was in first grade.
“They do not check credit history because they are in a win/win.”
This is called, “buy here, pay here”, here.
Not sure I get what you mean...
Are they allowed to look back more than seven years as far as BK, repos, foreclosures, etc..?
interest rates, for things like gov’t bonds,
are near zero.
the ‘sub-prime thing’ will be with us forever.
“The bank, through a stringent approval process used to be an extra layer between zealous salespeople and dumb consumers.
I’m aware of that-—I’ve been a homeowner for 53 years.
We had a case that was profiled here in Boston about a woman who earned about $50,000.00 a year,yet she purchased a $400,000.00 home——with practically nothing down and an ARM. That’s sheer stupidity.
.
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At age 60, he’s got to be drawing Social Security Disability payments rather than retirement benefits.
Taxpayer-backed student loans are the real crisis... these loans are paying for kids who have no business being in college in the first place can get worthless degrees when they are going to wind up being barristas at starbucks and default on these loans and the Dems will just waive the requirement to ever pay it back. Some leftist college professor makes tenure, and the school builds a new arena and hire more administrators with $200k salaries. It’s a tremendous scam... and You and I pay for it all.
At least with a used car, it can be reposessed and sold to the next “victim” of “predatory” lenders.
Actually, you know what is funny, today I was sorting through papers in a box as I settle into a new home I just closed on. 3 years ago, because I did not own a single credit card, I got a letter from a department store chain saying that my application for credit with them was rejected.
I laughed. Now I have 6 credit cards (that I rarely use), a nice truck I am making payments on, and a 30 year mortgage on a 67 acre farm. FU Kohl’s.
LOL. Not a fan of Kohls I take it. You are right about student loans. That is the real predatory lending scam.
My 82-year-old father-in-law died recently. After blowing his inheritance on women and crazy investments, he was living on Social Security with barely a penny to his name. Nonetheless, a few months before he died, he got an $18K loan to buy a used Cadillac This article suggests how it could have happened.
“After blowing his inheritance on women and crazy investments, he was living on Social Security——————”
—
Sorry,this made me laugh.
Good for him.
(I’m an 81 year old woman)
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The used car market may never stabilize. Today’s plastic cars are built to be thrown away rather than kept and tinkered with. Although I have a newer car, I’m much happier with my 1995 Camry. Parts are cheap on the Internet and any side-of-the-road mechanic can replace them. With the newer car, only an expert can fix it, and every little problem seems to stimulate a $500 repair estimate.
In a few years we’ll stabilize to become Cuba. Only grandpa will own a car because all the kids will have become government-conditioned not to even want one.
But it isn't over for the customer.
A friend who got bit at the end of an oil boom and couldn't make payments, took the vehicle back to the dealer and handed them the keys. The vehicle had been driven, but not abused.
He got a bill from the dealership for reposession fees, the cost of 'repairs' to the car (including the installation of options the vehicle had never had), detailing, etc. and the total was just slightly more than he owed on the vehicle in the first place.
Only now, he had no vehicle...
Pay cash, private sale. Caveat emptor.
Check out vehicle rental outfits. They have to turn over their inventory periodically, and the cars are usually very well maintained.
That is the only other ‘boom’ economy in the US (unrelated to oil).
And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.
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Fraud? YES ,, the bank was desperate to write the loan ,, so they could fulfill their obligation to a CDO house .. so they ignored , encouraged or altered the credit app themselves to make the loan happen... Who is the Victim? Well it’s you and me if anything we have our retirement in bought a piece of the debt.
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