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Subprime Auto Lending Faces Another Risk: Contagion

If the narrow funding sources for one small lender dry up, then, in a panicky domino effect, they might evaporate for its peers as well, according to Fitch. The outcome could be ugly for servicing and, by extension, for securitization investors.


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Latest News

Wells Fargo Ups Forecast for 2014 CLO Issuance to $125B

– Some $90 billion has been issued through the year to date and the bank expects to see another $40 billion - $40 billion in the fourth quarter.

Two Issuers Price $2B of CMBS

– Morgan Stanley and Bank of America Merrill Lynch priced a $911 million conduit backed by 65 loans on 100 properties; Deutsche Bank and Cantor Fitzgerald also priced $1 billion-plus deal.

Progress Residential Prices First Single Family Rental Bond

– The ‘Aaa’/ ‘AAA’/ ‘AAA’ rated class A notes priced at a spread of 110 basis points over one-month Libor, the same level as American Residential's inaugural deal issued in August.

JP Morgan, Barclays Pay No Price for Split Rating on CMBS

– A split rating at the senior note level had no apparent impact on investor demand for the latest offering of commercial mortgage bonds from JP Morgan and Barclays.

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Featured Articles

Can JPMorgan Save the Private-Label MBS Market?

– JPMorgan Chase is planning a fourth quarter spurt of mortgage bond sales that would keep afloat the market for securities not guaranteed by Fannie Mae and Freddie Mac.

European CLO Managers Taking a Shine to Volcker Rule

– The Volcker Rule doesn’t apply on their turf, but European CLO managers are nearly as eager to come in line with the regulation as their U.S. counterparts.

Oregon Standoff Shows Difficulties Escaping Trups Trap

– Albina Community Bancorp nearly managed to wriggle out of a trust-preferred vise, but it could still find itself getting squeezed.

Single-Family Rental Giants Branch Out

– Single-family rental giants are financing smaller players, setting the stage for a new wave of issuance.

Judge Sides with Creditors in Trups Bankruptcy Fight

– A judge has ruled that the involuntary bankruptcy of FMB Bancshares in Lakeland, Ga., may proceed, a decision that could embolden more trust-preferred creditors to pursue a similar strategy.

Making Catastrophe Bonds Accessible to Smaller Issuers

– Jardine Lloyd Thomson Capital Markets allows sponsors of catastrophe bonds to piggyback on its Market Re platform, reducing frictional costs. This makes makes it easier for smaller issuers, or those looking offload a specific risk, to access the market.

Credit Unions May Soon Join Ranks of Auto Securitizers

– While a proposed rule applies to several kinds of loans, Moody’s Investors Service expects that auto loans are the most likely asset to be securitized. Auto loans have been one of credit unions’ fastest growing asset class for two straight years and are the most widely offered product.

Are FHLBs the Answer to Jump-Starting Securitizers?

– Much of the input the Treasury Department has received on jump-starting private label mortgage securitization endorsed obvious steps; but there were some newer ideas.

The Five Challenges Facing Private Label RMBS

– Regulatory hurdles, stability of counterparties, the rep and warranties framework, exogenous variables, and technical factors all pose challenges; but GSE reform will probably have the biggest influence, according to Morningstar.

Why G-Fees Have Taken Center Stage in Housing Finance

– The always-important question of what Fannie Mae and Freddie Mac charge for loan guarantees is emerging as a central issue in the development of a stable housing finance market.

What Makes the DOJ's Subprime Auto Probe Different

– The auto loan market has a different track record and players than mortgages, setting the stage for a unique fight among prosecutors, lenders and dealers.

Warehouse Financing for CLOs Makes a Comeback

– The entrance of new equity investors, including business development corporations and CLO equity funds, willing to contribute the first-loss piece has led to a return of warehouse bridge funding lines that dried up after the financial crisis.

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Current Issue

China Auto Securitization Gears Up

As more and more Chinese gain the financial access to buy a car with a loan, lenders will look increasingly to securitization to keep origination going.

Current Issue