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Risks in Prime Auto Lending Are Rising for Banks: Moody's

By Kevin Wack

U.S. banks are taking bigger risks in auto lending as they compete for market share in a sector that remains red-hot.

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Latest News

Life Sciences Financier Oxford Pools Esoteric Loan ABS

– Specialized lender Oxford Finance is securitizing a $324 million notes package backed by first-lien senior loans it has originated for life sciences research firms and healthcare services companies.

Moody’s Grades First Green-Bond Euro RMBS

– GREEN STORM 2016 B.V., a €271.3M RMBS in The Netherlands, is the first-ever securitization of homes pooled together specifically for their energy-efficiency rating, according to Moody's.

Morningstar Warns On CMBS Exposure to For-Profit Education

– Government scrutiny could intensify default risks on up to $1.88 billion of commercial mortgage bonds backed by properties occupied by the likes of Corinthian Colleges, the University of Phoenix, and DeVry,

Freddie Mac Obtains 1st Reinsurance Policy on 15-Year Mortgages

– The government sponsored enterprise said Wednesday that it recently obtained an Agency Credit Insurance Policy that provides protection up to a combined maximum limit of approximately $201 million of losses on single-family loans.


Featured Articles

Congress Risks Letting Big Banks Control Housing Finance

– Recent legislative proposals to make piecemeal changes to the government-sponsored enterprises could set broader GSE reform on the wrong path.

Who's Afraid of TRID Risk? It's Not Who You Think

– The due-diligence firms that vet loans before securitization are erring on the side of caution when assessing the risk to investors of liability from the new consumer mortgage disclosure rules.

Now Begins Marketplace Lending's Maturity Chapter

– The nascent industry's early success will mean very little if these new companies don't take necessary steps to position themselves for the long term.

Freddie Mac Exploring More Ways to Shift Risk in Multifamily

– Freddie already transfers the bulk of credit risk in multifamily mortgages to investors through K-Deals, which look a lot like private-label commercial mortgage bonds. The new program, Structured Credit Risk, targets housing authority loans, which aren’t eligible to be used as collateral for K-Deals.

Why the Worst May Not Be Over for CLOs

– Participants at the IMN CLO Conference think the industry has more to worry about than exposure to oil and gas company loans; in fact, many think think the retail sector poses an even bigger risk to collateralized loan obligations.

Risk-Sharing Creates Accounting Conundrum for GSEs

– The government-sponsored enterprises' risk-sharing deals are being hailed as an innovative approach for Fannie Mae and Freddie Mac to offload credit exposure to private markets. But their growing popularity is raising questions about how these transactions should be reported in financial statements.

Despite Pain, BDCs in No Hurry to Unload CLO Equity

– Business development companies saw the value of their holdings in collateralized loan obligations fall further in the first quarter. Despite pressure from shareholders, however, they did not trim their holdings in the first quarter.

Flood Insurance Bill Could Threaten the GSEs

– Legislation that would authorize the use of private flood insurance on Fannie Mae and Freddie Mac mortgages was overwhelmingly approved by the House late last month, but concerns about its potential impact are beginning to crop up.


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Todd Baker

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Firm: Broadmoor Consulting LLC

In the news: Marketplace Lenders Are a Systemic Risk

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Energy-Heavy CLOs Diverting Cash to Shore Up Portfolios

For the first time since the financial crisis, some collateralized loan obligations are being forced to divert funds normally used to pay junior noteholders to be used for the benefit of more senior noteholders.

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