Credit Loosening Up?

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Permalink Reply by Ted Heater on October 22, 2009 at 9:15pm

Can't speak for Drive/Santander but Americredit is doing a fine job for us. Advances are GREAT on the right customer; upto 120%. As always, clean packages fund quickly. Look forward to seeing if they are going to be back to capacity by 2Q 2010 as I have heard they plan on being.

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Permalink Reply by Robert B Furman on October 23, 2009 at 11:29am

We just had our first Americredit (no fee to dealer via GMAC) deal approved yesterday.
Let's hope it is just the beginning.The program has been out there a while.

I'm thinking that these programs are the first signs of a crack in the credit freeze.

Let's face it most people still have their jobs and most people are still making their payments.

I say that because I don't see an influx of repo's at the auction and I attend regularly.

What I have a hard time balancing is the conventional banks are buying more paper in the absence of the "shadow banking system - albeit with much (too)tighter loan standards.

That being said as good loans get paid down - sooner or later the depository banks are going to realize if they don't start buying stronger, their overall loans outstanding portfolio will decline.

With the cost of money at near zero rates - these banks make money by making loans.

What we need are some "Holiday specials" of relaxed (not loose)buying standards".As the packages of business come in and establish the fact that market share gains can be put on the books and be very profitable - others will join the "slightly more aggressive" loan policies.

Then we'll get some marketplace competition and relax the overly strict computer buying that is too often the only response a dealer gets.

As an example - we just got a computer generated qualification on a 710 beacon score with high income and 10% of after tax income going to cover monthly debt(the house was paid for).The customer was putting 13,000 down and the computer wanted 4000 more with a 500 fee. Local banker snarfed up the deal and loved the opportunity.

These national banks are losing market share to local banks and credit unions.

When one comes out of the either, they all will quickly follow.

What we need is a bit more competition vs the "hide in a cave" action we've seen for too long.

Then we'll have us a recovery that everyone can feel and see.

I think this is just the beginning of a relaxation that will still be very prudent,but go a long way in giving us a believable recovery.

Bob

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Permalink Reply by Jerry Adcock on October 23, 2009 at 11:52am

I USE DRIVE FINANCIAL AND AMERICREDIT I HAVE SEEN A LOOSENING FROM DRIVE BUT A FEW TOO MANY STIPS FROM AMERICREDIT BUT THEY ARE LOOSENING UP. I HELPED START AMERICREDIT BACK IN 1992 WHEN THEY WENT FROM URCARCO TO AMERICREDIT FINANCIAL WOW! WHAT A COMPANY.

JERRY

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Permalink Reply by Titan Crawford on October 24, 2009 at 2:11am

Also a lot of local banks are there. In my market Lighthouse and Reliable Credit are doing decent calls. I always look to Americredit, Chase, Wachovia first but if anything I know I have a deal with some backend with both of my local banks.

Titan

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Permalink Reply by Tom White Jr. on October 25, 2009 at 1:09pm

I am seeing a VERY slight uptick in approvals from all of my Special Finance lenders (with the exception of Citi). Clean packages fund fast with just about everyone. Americredit and Chase in particular are trying to put deals together. CPS is back in the game as well; although their fees are making it difficult to achieve benchmark GPVRs...

All in all, I am encouraged at the direction we seem to be headed. I still believe we are in for a very tough 4th quarter, but all signs point to a pretty good 1st quarter shaping up...

My two point five cents per usual...

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