Liferep.net

March 2, 2015

// March 2nd, 2015 // Daily News

Wells Fargo Puts a Ceiling on Subprime Auto Loans

Wells Fargo, one of the largest subprime car lenders, is pulling back from that roaring market, a move that is being felt throughout the broader auto industry.
The giant San Francisco bank, known for its stagecoach logo and its steady profits, has been at the center of the boom in making loans to people with tarnished credit scores. Wall Street, meanwhile, has been bundling and selling such loans as securities to investors, reaping big profits while allowing millions of financially troubled borrowers to buy cars.
But now, amid signs that the market is overheating, Wells Fargo has imposed a cap for the first time on the amount of loans it will extend to subprime borrowers.
The bank is limiting the dollar volume of its subprime auto originations to 10 percent of its overall auto loan originations, which last year totaled $29.9 billion, bank executives said.
The decision, detailed in interviews with top Wells Fargo executives, along with other large auto lenders, is a sobering moment for the booming market. Other lenders may decide to take their cue from Wells Fargo, one of the nation’s largest lenders. After successfully sidestepping many of the catastrophic mortgage losses that hit its competitors during the financial crisis, the bank has developed a reputation for deftly managing risk.
Over all, auto loans to subprime borrowers — typically people with credit scores at or below 640 — have more than doubled since the financial crisis, with one in four new auto loans going to subprime borrowers. In the second quarter of 2014, for example, total auto loan originations hovered at the highest level since before the financial crisis, according to the Federal Reserve Bank of New York. In that quarter, lenders originated $20.6 billion in subprime auto loans, nearly two times as much as in the same period of 2010.
Behind the surge are two major forces: Large banks, weathering a slowdown in other types of lending like mortgages, have increased their auto lending. And much as in the housing boom, investors in search of higher returns, like insurance companies and hedge funds, are buying billions of dollars of investments backed by subprime auto loans.
Such growth, though, has given rise to concerns, like those at Wells Fargo, that growing competition is fostering lax lending practices, including longer repayment periods and increased loan balances.

Today’s Inspiration

Testing the Motive of the Heart

by Joyce Meyer – posted March 02, 2015

After these events, God tested and proved Abraham and said to him, Abraham! And he said, Here I am. [God] said, Take now your son, your only son Isaac, whom you love, and go to the region of Moriah; and offer him there as a burnt offering upon one of the mountains of which I will tell you. So Abraham rose early in the morning, saddled his donkey, and took two of his young men with him and his son Isaac; and he split the wood for the burnt offering, and then began the trip to the place of which God had told him.
– Genesis 22:1-3

I believe God was testing Abraham’s priorities. Isaac had probably become very important to Abraham, so God tested Abraham to see if he would give up Isaac to Him in faith and obedience. When God saw Abraham’s willingness to obey, He provided a ram for Abraham to sacrifice in place of Isaac.

Remember, we all go through tests. As with Abraham, these tests are designed to try, prove, and develop our faith. One of the tests I had to face was, “What if I never have the ministry I’ve dreamed about for so long? What if I never get to minister to more than fifty people at a time? Can I still love God and be happy?”

What about you? If you don’t get whatever it is you want, can you still love God? Will you still serve Him all the days of your life? Or are you just trying to get something from Him? A fine line divides the motives of the heart between selfish and selfless; and we must always make sure we understand which side of the line we are standing on.