2008 Deja Vu: GMAC Confirms SEC Probe Of Subprime Loans, Will "Investigate Itself"

Tyler Durden's picture

While not entirely surprising, the fact that GM Financial has admitted that:

  • *GM FINANCIAL: SEC PROBING SUB-PRIME LOAN SECURITIZATION

Of course, we should not worry about this... we are sure it is "contained" as GM reports it is "investigating matters internally" - just like it did with the ignition switch year ago?

Via GM's 10K,

In July 2014, we were served with a subpoena by the U.S. Department of Justice directing us to produce certain documents relating to our and our subsidiaries’ and affiliates’ origination and securitization of sub-prime automobile loans since 2007 in connection with an investigation by the U.S. Department of Justice in contemplation of a civil proceeding for potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

 

Among other matters, the subpoena requests information relating to the underwriting criteria used to originate these automobile loans and the representations and warranties relating to those underwriting criteria that were made in connection with the securitization of the automobile loans. We were subsequently served with additional investigative subpoenas to produce documents from state attorneys general and other governmental offices relating to our sub-prime auto finance business and securitization of sub-prime auto loans.

 

In October 2014, we received a document request from the Securities and Exchange Commission in connection with its investigation into certain practices in sub-prime auto loan securitization.  We are investigating these matters internally and believe that we are cooperating with all requests. Such investigations could in the future result in the imposition of damages, fines or civil or criminal claims and/or penalties. No assurance can be given that the ultimate outcome of the investigations or any resulting proceedings would not materially and adversely affect us or any of our subsidiaries and affiliates.

Nothing to see here, move along... the rebirth of the subprime lending bubble...

 

and the delinquencies are alreasy surging...

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Callz d Ballz's picture

With cars costing as much as homes a few years ago, this should be good.

DetectiveStern's picture

I like this. I always thought the arguement for MBS was that the underlying asset will (theoretically) hold it's value. Cars lose 40% of their value as soon as you drive off the forecourt. Houses do appriciate in value cars never do in the short term. EVER.

IANAE's picture

Never heard that one...abs/mbs is all about liquidity and the illusion that 'risk' disappears when transferred OBS.

Glass Seagull's picture

 

 

I feel much better that they'll be policing themselves.

 

https://www.youtube.com/watch?v=M1owcncKCHg

SumTing Wong's picture

But should the government investigate Government Motors instead? Wouldn't that make us feel much better?

NoVa's picture

Maybe today's news of investigation is related to yesterday's news that the CEO was stepping down unexpectedly, after 18 years...

Naaaahhhhh -  just coincidence

NoVa

 

cossack55's picture

Like the Fed auditing Ft. Knox. LMFAO

Osmium's picture

Doesn't matter, "it's contained"

Kaiser Sousa's picture

i will never buy vehicle made by this shit bailed out company...

even though the newest CTS V sedan looks fat..

Metalredneck's picture

May as well have a bad loan for a bad vehicle.

williambanzai7's picture

GM is a moron hazard vortex

QQQBall's picture

 

My neighbor loves his CTS and he is really into cars. He said the base model was under $30k with a 2.0 Liter engine. I now have over 315k on my Honda Accord and my mechanic says my next car should be top end (used) Japanese as MBZ and BMW are expensive to maintain. BTW, who is designing the new GM SUVs, they look like spuds with wheels?

cossack55's picture

Ha. 266,000 on my Honda CR-V.  Going for 400,000 if I live long enough.

maskone909's picture

I drive a turbo 92 civic hatch. Motor has 200k on it. I drive it like i stole it every day not a problem yet. I love killing vettes to see the looks on their faces. Its a real sleeper

QQQBall's picture

hahahha. I got 29 mpg on my last tank, mostly freeway in 5th gear, and I think that is with ethynol-spiked regular gasoline in Cali. Timing belt every 100k, clutch every 120k and plugs every whatever. My mechanic said the plugs he just replaced were burning clean. I tell you one thing about the Accord, someone knows how to design seats. The seats are still comfortable and obviously I drive alot. My 1986 Toyota Cressida was the best car. Got 356k on it and the trannie went, although I put a used Japanese engine in at 260k. Why people deal with GM and all the recalls and issues with the vehicles is beyond me.

 

I just passed smog. I could see the techs standing around my road warrior wondering at the fact that it passed first try. Fuck GM.

maskone909's picture

Used skyline, call it a day.

TuPhat's picture

There is no intelligent design at GM.  I think they rely on evolution or something.

glenlloyd's picture

just look up 'design by committee' or 'Aztec' and that explains it all.

Chauncey Gardener's picture

And people think (some people actually think) that Acura's look like they were designed on an acid trip. At least that's what Adam Corollo stated on his short-lived The Car Show.

The Aztek must have been designed on a bad acid trip--oh, wow, man, let's add a tent for camping.

ronron's picture

General Moaners

Osmium's picture

Not that any of this makes a difference.  S&P going vertical again.

TuPhat's picture

I'm thinking of buying a Honda Pilot.  I've had enough GM crap.  Problem is that when I check out the deals on their website it's all about cheap financing and leasing.  Can't get a break if you just want to purchase.

SumTing Wong's picture

So take their free money and put the rest of what you have into gold and silver. Then when the dollar goes to shit in the cming years, you can pay off the car with just a couple of ounces and keep the rest all for yourself...plus have a Honda Pilot.

I didn't do this. I drive a 2005 Civic that cost me less than $3000 earlier this year. Had to replace the alternator, and all has been good since. This thing only has 160k miles on it, so I've got another ten or fifteen years on it. 

So, free advice is likely worth what you paid for it...

HerrDoktor's picture

Go for the quality product.  Sum's advice is sound. I did get a deal on a 2012 Ridgeline, but had to haggle with the dealer.  Got good financing, and paid it off early.

NotApplicable's picture

I bought my last used car for cash at a dealer in a neighboring state. They didn't know how to fucking act, and I still had to sit in the showroom for hours while they figured it all out.

Mayer Amschel Rothschild's picture

2007 Honda Pilot 4WD is the best material possession of my life.  LOVE that automobile.  Next new car purchase (200k miles from now) seems like it will be a Honda.  Sure as shit won't be GM.  I would strongly consider a Ford.

headhunt's picture

Yeah, after getting burned by the union/obama orchestrated bailout, looking at Ford.

Any Dealer will take cash and love it, especially at month-end. If they have not hit their 'number' for the month they will deal. They floor plan all those autos sitting on their lot, each month rolls over another payment plus interest.

disabledvet's picture

An investigation?  SHOCKING!

 

I'm sure they'll put their past man on it.  Remember...BAILOUTS DO NOT FAIL!

Carry on....

DriveByLurker's picture

I think that for the sake of appearance, they'll end up bringing in an outsider to oversee the investigation.  I understand that Captain Renault is available now that he has completed his investigation of reported gambling at Rick's American Cafe.  

Kaiser Sousa's picture

this must be the reason why  - once again - the Dow was pumped higher in the last hour of trading in London....

Callz d Ballz's picture

 

Wait till the recently formed CFPB juggernaut gets ahold of auto finance...

 

http://www.cfpbmonitor.com/tag/auto-finance/

LawsofPhysics's picture

As a "limited liability person" I will be henceforth using the very same accounting standards, regulation, and "self-policing" as well...

fuck em.

MsCreant's picture

Is "investigating yourself" a new term kids are using for masturbation? Guess I'll go to Urban Dictionary and see what they say...

noben's picture

You beat me to it. 'Investigating yourself' leads to blindness, hairy palms or a dull mind. I was told.

HonkyShogun's picture

Be careful investigating yourself. You could go blind.

Mayer Amschel Rothschild's picture

Throw in a case of hairy palms, too.

NotApplicable's picture

I personally know of two people who have lost new cars they never should've had in the first place.

wmbz's picture

This should mean something, but who really gives a shit. GM,GMAC,ALLY can fuck up all they want and screw as many as possible.

No problem, if and when they run into trouble, then the USSA taxpayer will take it in the ass. Business as usual! MF'ers!

Dragon HAwk's picture

Wouldn't it be funny if the government had to pay interest from the people when it wanted money to spend..  Oh wait.. I see a problem here. they already tried that..

buzzsaw99's picture

over a quarter of the loans they made in 2013 were garbage. can't wait to see what 2014 and 2015 bring, especially with the oil bust well underway. the fraud always comes out in the end.

vote_libertarian_party's picture

So the bonds will go ka-boomy???

 

What's the big woop?  Doesn't the Fed all of them anyway?...or will shortly???

wissen dass scheiBe's picture

Gotta move these large trucks and suvs before oil spikes again.

Channel stuffing only works so long.....

Raging Goose's picture

I bet Ms. Channel is getting pretty sore at this point....

Burls's picture

I love it when I get to investigate myself.

I always come out smelling like a rose!

Last of the Middle Class's picture

TARP=II the movie. coming to a theatre near you!!!!

Last of the Middle Class's picture

from 1999 to 2014 bought 3 different GM models, all 3 within 12-18 months seat heater went out. You'd think in 15 years they could either not offer something substandard or learn how to make it right. Not with those idiots. I'm done with GM.