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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Moving and Grooving's picture

A little further north in Hollywood 'suffer the little children' has taken on a whole new meaning.

 

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Swamp Yankee's picture

Silly Detroit:   NEVER go full retard.

yellowsub's picture

they need housing too, does that mean a mortgage program is being created.

shankster's picture

Only if the house has a pool and they need an RV too.

shankster's picture

That will be a hit in Houston and Miami.

Willard J Clinton's picture

(((They))) are giving rapefugees subprime auto loans at half the interest rate (((they))) offer them to Americans, a.k.a. the "Coudenhove-Kalergi" auto finance program......

shankster's picture

I am coming across the border as a refugee..shit the living be easy that way.

StreetObserver's picture

These loans will be directly subsidized by the taxpayers. Refugees get immediate lifetime suplemental security insurance payments from social security.

I agree, what the hell are we doing in Afghanistan? Bring all American troops home and put them on the U.S. border, kick all refugees back to where they came from and spend that money on Americans.

artichoke's picture

I didn't see that they get SSI automatically.  They can qualify for 7 or 9 years of SSI (vs. lifetime for a citizen) but it looks like they have to meet the usual standards for SSI.  That's what I found on web research, do you have a link showing different?

Mena Arkansas's picture

San Diego has one of the largest homeless/transient populations on the west coast.

They are even washing the streets with bleach due to the Hep A outbreak related to human feces.

http://www.zerohedge.com/news/2017-09-17/san-diego-begins-bleaching-stre...

San Diego is also already home to 170,000 illegal mexicans.

http://www.sandiegouniontribune.com/news/politics/sd-me-immigration-stud...

And yet they are settling rapefugees there and setting them up with cars, housing, healthcare, groceries and jobs?

So much for putting America First.

FoggyWorld's picture

This is more than they do for the poor who were born here.  Sort of amazed there isn't any blowback coing from Americans in need.

aliens is here's picture

Fking refugees get special treatments on everything now. What about us citizens? I see Somalis drives better cars than I do while on fking food stamps and other benefits. Where is my fking share of pie?

artichoke's picture

What's the IRC?  I don't think that acronym was expanded in the text.

 

Anyway this program is fine as long as non-refugees qualify too.  Go thru income verification etc. and get half off your rate.  Otherwise it should be illegal.

Moving and Grooving's picture

'Internal Refugee Combustion'?

 

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SmittyinLA's picture

"There's Now A Subprime Auto Loan Program Designed Specifically For Uber and auto manufacturers"

There, fixed it.

I loved they used the used Camry @9% rather than the Escalade @15%

Rex Andrus's picture

Can't read the traffic signs? No problem. No license? No problem. Just come on down to Moonbeam's M13 Rayciss Join Task Force and we'll give you a lethal weapon and lots of insurance at no cost to you! Come on down!

*Poor natives GTFO

Son of Captain Nemo's picture

That get paid by a certain agency in McLean Virginia that have unlimited access to a "printing press" and that uses them as "proxies" with multiple visas to come and go when they are summoned!...

Ask me how well that arrangement is working out since this happened (http://www.ae911truth.org/)?

Son of Captain Nemo's picture

"Per The San Diego Union-Tribune:"?... Hmmm?... Where have we heard this before???...

My understanding is that the ones that hang out in San Diego are very "religious"... devoutly worshipping strippers and "blow" and flying commercial jetliner(s) into very sturdy steel frame structures without a "pilots license"!

pparalegal's picture

A new gold rush serendipity for comrade Jerry Brown and his progressive slave owning Mexican mafia legislature. Comes just in time for his registration fee and gas tax doubling fatwas. Too bad the "we ain't gonna build anymore" roads are packed and crumbling.

What the hell, everyone should get free college, food, housing, minimum substance cash, medical care and a 700 credit rating in unicorn candy utopia USA.  Good thing that heavily taxed marijuana is now legal

franzpick's picture

The Sub-Human Auto Loan offering: people will stay away in droves.

He-He That Tickles's picture

Why are we making these people pay for cars?

rf80412's picture

Go buy some refugees a car yourself rather than making us do it.

I don't want these anti-Western parasites in my country in the first place.

Nature_Boy_Wooooo's picture

In my part of town they only need one car. One diver can drop off 4-5 refugees at busy intersections to pan handle all day and pick them up in the evening. Welfare check is all digital now so they don't even need to go pick that up.

Living the American dream!

 

aloha_snakbar's picture

What about rapefugees? We certainly dont want to leave them out...that would be racist. We could have a sliding scale type discount system depending on their victims. A goat or other barnyard animal could be at the high (smaller discount) end of the spectrum, and high value victims, like newborn babies, would get them the biggest discount of clown bux.

Welcome to the USSA!! Land of the sick...home of the depraved....

RagnarRedux's picture
It seems East Asians aren't fooled by Jewish agendas of mass third world immigration, replacement level migration, or "asylum seekers".

 

Japan's Top Economist - Sweden Was Ruined By Immigrants 

https://www.youtube.com/watch?v=ljPTcUMT4co

Bai Suzhen's picture

Do refugees really need special loans?  Years ago, too many years to add up, I was a mushroom farmer for Big Agri.  Worked mostly Phase II, spawning and Pasteurization, etc.  Anyhow, in the picking rooms, we had a lot of Vietnamese refugees who came to the US after Saigon fell to the Reds.  I remember a family of about 6 or 7 people, from Grandpa to teenager.  They'd show up in a silver BMW 2002, worked faster and harder than the Mexicans (who never had anything to show for their work), and when the day was over, they'd all pile in the BMW and go home.  In the morning, they were first at the plant, and the last ones to leave, as long as there were 'shrooms to pick (pickers were paid by the bucket).  My guess is that they paid cash for their Bimmer.  We hired a couple of Mariel boatlifters from Castro's jails, but they never lasted long...would get drunk on the weekends, go nuts, and wind up in jail somewhere.

Drop-Hammer's picture

The jews had to think of some way to keep this insanity strung out.  They have already bled dry us evil YT's, so what better way to continue their treacherous game than to import tens of millions of colored peasant untermensch to replace us as debtors and voters.  

robertocarlos's picture

We have ads for sub-prime car loans. First they had this ugly Jew broad as the buyer but now they got smart and switched to a young male refugee.

Montana Cowboy's picture

An average loan size of $5571. For a refugee, there is an impossible gap between $5571 and a new car. Looks like they are using the refugees to absorb the growing glut of up-side-down lease turn-ins.

Thrawn's picture

Good for properly vetted refugees who are fleeing their country for safety and a new life who wish to respect the laws of this country and make it a better place.

Would be nice if Americans would also get a better rate for subprime loans.