There's Now A Subprime Auto Loan Program Designed Specifically For Refugees

Tyler Durden's picture

If ever there was a doubt that auto sales have been pushed to the absolute max in this iteration of the industry's debt-fueled bubble, then consider the following program specifically designed to underwrite subprime auto loans to refugees who have recently arrived in the U.S. with absolutely no credit history or record of any kind.  Per The San Diego Union-Tribune:

Newly arrived refugees, especially in driving-oriented places like San Diego, can have trouble finding jobs if they don’t have cars. Because new arrivals generally have no credit history in the U.S. and sometimes make mistakes early on because they don’t understand the system, they often can’t get affordable loans to purchase a car.

 

“The struggle of a low-income immigrant family that’s looking to move up, it’s hard enough as it is,” said Kasra Movahedi, director of the Center for Economic Opportunity. “If you also then have low credit, it just becomes that much harder in a hundred small and not-so-noticeable ways. Unfortunately, these are the people that can afford it the least.”

 

That struggle is similar to other low-income families coping with low credit scores, Movahedi said.

 

“It has to start with one recognizing the importance of a vehicle to a family’s financial stability and solvency,” Movahedi said. “The vehicle allows you to earn an income. In the absence of that, people are going to have a really hard time making money.”

 

Four offices of the IRC currently offer the program — San Diego, Oakland, Phoenix and Salt Lake City. The organization is planning on adding it to its Atlanta office soon, Movahedi said.

Subprime

Even better, these refugee auto loans are underwritten at interest rates that are roughly half the national subprime average.

Beyond providing a much lower interest rate than the national average for subprime lenders, the IRC’s program requires borrowers to go through financial education courses and to sit down with a financial counselor to make a budget. It also requires earned income verification.

 

In San Diego, many refugees have gotten loans through the program by submitting letters from an employer that will hire them as long as they have a way to get to work, Movahedi said. Through the car loan program, the refugee is able to accept the job offer and then has income to pay off the loan.

 

“We view auto loans as something that can enhance and expand the geographic scope of your job search,” Movahedi said.

 

Farhad Yaqoobi, 24, is a refugee from Afghanistan who came to El Cajon about 11 months ago and used the program to buy a used Toyota Camry.

 

“It saved me time and solved lots of my problems,” Yaqoobi said.

All that said, IRC notes that their subprime auto loan portfolio performs substantially better than those created by the likes of "Santander"...a fact that they contribute to actually taking the time to verify income. 

By virtually every metric, these low-income refugee borrowers and the IRC’s auto loan portfolio have significantly outperformed the national subprime industry. Consider, for example, that while the national subprime auto loan 60-day delinquency rate is 5.07%, the IRC’s portfolio has 0% 60-day delinquency. Similarly, the IRC and CEO’s auto loan portfolios have a combined historical default rate of 1.95%, which is well below the national average of 11.96%5 for subprime auto loans.

 

Underwriting due-diligence matters. Recent reports have revealed that one of the nation’s largest subprime auto lenders, Santander, verified income on only 8% of all of its subprime auto loans. By contrast, the IRC requires not only income verification, but a meeting with a financial coach, financial education training, and a completed family budget as part of our loan making. This personalized review of the potential borrower’s situation – even for modest loan sizes – leads to careful decisions about readiness to take out the loan. The IRC helps borrowers plan for the loan and aims to set them up for success. By contrast, many subprime auto loans are being made with shockingly little due diligence. Given the unabated growth in size and number of actors in the subprime auto loan market, one can readily question whether the real business model is predicated on loan repayment margins, or if it is actually organized around borrowers defaulting and vehicles being repossessed and resold over and over again. Low-income families need greater protection from loans that undermine rather than bolster their financial footing.

Of course, we suppose there's no better way to assimilate a new generation of Americans than to throw some subprime debt at them so they can purchase a bunch of stuff they can't really afford just yet...it's the American way.

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JoeTurner's picture

How about loans for rape victims of migrants to help with the life long trauma ?

hedgeless_horseman's picture

 

Farhad Yaqoobi, 24, is a refugee from Afghanistan who came to El Cajon about 11 months ago and used the program to buy a used Toyota Camry.

How about getting the USA the fuck out of Afghanistan so there wouldn't be any war refugees?

Is it just me, or does it seem like the world has gone full retard and nobody seems to mind?

I feel like I'm taking crazy pills.

Creepy_Azz_Crackaah's picture

Are there special deals on El Caminos with carpet in the back for the rapefugees?  If not, it's a rayciss program.

Stuck on Zero's picture

I'm thinking that this is a covert subsidy for Uber and Lyft.

nuubee's picture

I cant tell anymore, is this better or worse than an organization designed to pair up apathetic american voters with illegal immigrants to enfranchise non-citizens or felons?

http://www.scpr.org/news/2016/04/06/59087/california-counts-project-aims...

CheapBastard's picture

 

"I'm entitled to a car."

~ Ahkmed el Mohammed bin Sameer

HopefulCynical's picture

"And a five year old in the back seat of it, too!"

 

--Ask about our Rapefugees First program!!

YUNOSELL's picture

I can't wait until "The Big Short 2" comes to theaters

evoila's picture

They give them free downpayments too.  $1850 per person, up to $11K per family. Being funneled through catholic charities, which then farm it out to places like "non-profits" helping refugee resettlement. Its a fucking sham. We're fucked left, right, and center. The people of this country are for the most part, morons I suppose.  What other explanation is there.

 

http://www.breitbart.com/big-government/2015/11/29/unholy-alliance-chris...

 

 

RedBaron616's picture

What other explanation? The people in this country are not in charge. The "elite" are in charge. Decent people don't have time to protest. We have jobs, families, and things around the house that need doing. If you aren't rich and famous, you don't count inside the Beltway.

aliens is here's picture

Religious organization my asshole! If they are so charitable let them use their own money to settle them FKers.

TheObsoleteMan's picture

Oh, it's a religion alright, make no mistake about that. I have seen these people up close and personal {the folks that work for these religious orgs}, and believe me when I tell you they really believe they are on a mission from God.

JoeTurner's picture

we (CIA) need to be in Afghanistan to keep the heroin flowing that keeps Americans sedated and docile... 

RedBaron616's picture

People who would do heroin are useless to this country even if they weren't stoned. If you are stupid enough to mess with that stuff, you are a drag on the country, not an asset. The CIA can't make you buy heroin, can it?  Your entire logic is faulty. Lay off the heroin. LOL

BandGap's picture

It doesn't "seem", it is the new reality. People just aren't saying anything about the lunacy.

I used to wonder about going nuts, now I just watch the show. It is headed for a spectacular ending.

CheapBastard's picture

NPR highlighted this rapefugee corruption all morning long...

 

....just kidding. lol

RafterManFMJ's picture

I’m sorry fellow Americans but YOU PAY DOUBLE THE INTEREST of some rag head illegal. LOL FUCK THIS NATION SIDEWAYS!!

peopledontwanttruth's picture

Kinda like this

Isaiah 29:9-10
Holman Christian Standard Bible (HCSB)

9 Stop and be astonished;
blind yourselves and be blind!
They are drunk, but not with wine;
they stagger, but not with beer.
10 For the Lord has poured out on you
an overwhelming urge to sleep;
He has shut your eyes—the prophets,
and covered your heads—the seers.

unsafe-space-time's picture

"we had always been at war with Eastasia" and you are the ones who are refugees.

Raffie's picture

affordable car bombs, that is exactly what we need in America.

RedBaron616's picture

Of course, if you want to build a car bomb, why would you buy it? Rent one for a day, load it up, and boom, all for $29.99. Someone would have to be an idiot to purchase a car for a car bomb. Use someone else's!

charlewar's picture

islamic filth must promise not to run over infidels.

ipso_facto's picture

How many different government subsidies are involved?

Rex Andrus's picture

You can be sure the foundations are behind this and that they will be getting paid too.

VWAndy's picture

 The stupid just has better funding.

SunTzu2U's picture

They'll sign anything, they are just happy they are getting a house.

 

He doesn't do loans for immigrants, their credit isn't bad enough.

Squid Viscous's picture

more jewish usury victims, hurrah.

 

Sparehead's picture

Don't fret for those "victims". The productive members of society will ultimately be paying off those loans. Think of all the economic growth we're creating by paying for their food, housing, cars, and that big screen TV. Even if it were stolen that cost will eventually be passed on to the productive members of society. Just don’t expect a thank you to be coming between the shouts of racist, privileged, xenophobe (uttered by some SJW princess), islamophobe/crusader, colonialist, cultural appropriator, “fair share” dodging tax payer, white flighter or gentrifier, fascist (often as you’re being clubbed by a political thug), or the ever present “gimme yo money, cracka!”

sister tika's picture

Farhad Yaqoobi, 24, now drives a car that is much newer than mine I can assure you.

It won't be long until he's working at Burger King or QueerBucks making serious dough and living the Muslim dream right here in the Land of the Free.

Rex Andrus's picture

If you hit him head on at 40mph with your 60's hemi you'll be able to drive away, and he and his car will be dead.

ThuleNord's picture

Wtf is going on? Do we still have a country or not? Globalist nightmare

FreeShitter's picture

DO u really have to ask? 

Tallest Skil's picture

Take heart in the fact that we have casus belli to kill them all rather than just deporting or sequestering them. When the Day comes, of course. Also take note that it is your DUTY to do so and to not cuck out.

hound dog vigilante's picture

 

What could go wrong?

 

almost 90 million working-age americans are unemployed/under-employed, so throwing free shit at refugees & immigrants makes a ton of sense.... /sarc.

PGR88's picture

Mor fruits of a completely unbacked, fiat, manipulated currency issued by a politicized central bank.

No political or social-engineering scheme needs to go unfunded.

Bryan's picture

Insanity seems to have no bounds.  Turn the dial to 11!

RobertTheGenius's picture

If only there was a way to short this  :(

alangreedspank's picture

"Newly arrived refugees, especially in driving-oriented places like San Diego, can have trouble finding jobs if they don’t have cars. Because new arrivals generally have no credit history in the U.S. and sometimes make mistakes early on because they don’t understand the system"

Someone with 100+ IQ would conclude the area or the country is not a place to emigrate to according to these circumstances. Someone with 85 IQ.....just does it anyways. Lowering the bar to accomodate what should not be accomodated... 

buzzsaw99's picture

great, another fucktarded uninsured motorist hits the road.

Bigly's picture

Just like in LA.  900__ zip codes are redlined to infinity....

taketheredpill's picture

The income verification is key, plus the contingent loan based on employment.

The difference is the automakers are motivated to get the product off the lots by any means possible.

 

JLee2027's picture

All interest is illegal under the laws of GOD.

 

RedBaron616's picture

Back then, the currency was silver and gold. With fiat currrency, the interest just makes up for the inflation to the currency.

Mena Arkansas's picture

Why are they here?

Who is the responsible party for letting them in?

When are they leaving?

Jibe Ho's picture

 Heysuse threw the money lenders from the temple. Ask Catholik Charities "What would Jesus do?.