Auto Securitization Report Highlights Riskier Outliers

AmeriCredit and Santander Consumer USA stand out as the two lenders securitizing auto loans with an average loan term above 70 months and below a 600 credit score, according to the latest report from DBRS.

In AmeriCredit’s most recent issuance included in the report the lender had an average credit score of 580 and an average original loan term of 72 months. Likewise, Santander’s DRIVE platform had an average credit score of 567 and an average term of 71 months in the latest issuance included in the report.

By comparison, other lenders such as Fifth Third Bank and USAA Federal Savings Bank also extended average term above 70 months, but average credit scores were much higher in the 730 to 750 range, according to the report.

The DBRS report draws on asset-level data that lenders issuing public securitizations have been required to report throughout 2017 as part of regulation AB II. The 211-page report is released quarterly in an attempt to organize the vast amount of data newly available in public issuances.

While year-over-year comparisons are not yet available, the report compares companies in the ABS space to reveal the outliers. For example, World Omni Financial Corp. offers the largest loan-to-value range from nearly 0% to more than 900%, even if its average is in line with the rest of the industry.

Earlier this year, publicizing this asset-level data revealed that Santander verifies income on 8% of loans in its pools, so unsurprisingly the company’s DRIVE and SDART platforms both have the highest percentage of no-credit score borrowers.

Yet, Santander isn’t the only company lending to thin-file consumers. AmeriCredit, CarMax, American Honda Finance Co., and World Omni all registered a small number of no-credit-score borrowers in its pools this year.