anonB on Nostr: Auto the new subprime loan problem? “Auto bonds increased in kind, as lenders ...
Auto the new subprime loan problem?
“Auto bonds increased in kind, as lenders packaged those loans together and sold them as securities on Wall Street, where ratings agencies labeled them as largely safe investments. According to Bloomberg News, lenders sold bonds containing $76 billion in subprime loans in 2021 and 2022. All of this was predicated on the belief that the vast majority of borrowers would continue to make their monthly payments. “Investors are always thinking they’re protected,” said Joseph Cioffi, a partner at Davis+Gilbert in New York who specializes in finance and corporate insolvency. “And the lenders didn’t seem like there was any concern either.””
“Auto bonds increased in kind, as lenders packaged those loans together and sold them as securities on Wall Street, where ratings agencies labeled them as largely safe investments. According to Bloomberg News, lenders sold bonds containing $76 billion in subprime loans in 2021 and 2022. All of this was predicated on the belief that the vast majority of borrowers would continue to make their monthly payments. “Investors are always thinking they’re protected,” said Joseph Cioffi, a partner at Davis+Gilbert in New York who specializes in finance and corporate insolvency. “And the lenders didn’t seem like there was any concern either.””