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Wolfgang T. Sailler
Certified Financial Planner ™

Joseph D. Witt
Certified Financial Planner ™

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PO Box 5190
Salem, OR 97304-3060

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Office: (503) 375-0208
Home: (503) 587-9811
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Subprime Lending 2.0, anyone?

September 13, 2013

Although it has been only five years since Lehman Bros bit the dust in the wake of too much subprime lending in the housing market, we are already working on a new addition of a credit debacle, but this time in automobile.

When you open the advertising pages of the paper you will notice two new come-ons: No credit or bad credit is 'no problem' and car loans are now offered with 84 month terms. Eighty four months, that is seven years dear reader. During that time the loan balance is bound to be more than the value of the car. In the first half of 2009 there were a total of $10.8 bln in subprime car loans (to people with credit scores below 620) outstanding. At this time that amount has doubled to over $21 bln, while prime auto loans only increased by 38% and the default rate is increasing.

With auto sales accelerating, August 2013 saw an increase of 17% over 2012, the volume of total and especially subprime loans is reaching new heights. This will not end well for the lenders or the carmakers. Where are the regulators to put the brakes on these practices?

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(503) 375-0208




PO Box 5190
Salem, OR 97304-3060



Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Goldmark Financial Planners, LLC, is a Registered Investment Advisor Firm in the State of Oregon. Prior to any advisory work conducted outside Oregon, Goldmark Financial Planners, LLC, would become registered in that jurisdiction or qualify for an exemption or exclusion to the registration.

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