The auto finance industry has long suffered when it comes to truly understanding the assets that are leased and financed on a daily basis around the U.S. This lack of insight is perhaps most apparent when it comes to titles and the remarketing of vehicles. Two significant problems stand in the way of reducing risk in auto lending.
Problem 1: Fraudulent Titles
As is happening in Houston right now, and has previously happened in New Orleans and North Carolina, thousands of vehicles are being destroyed by flooding as a result of a natural disaster. These affected vehicles will have insurance claims filed and settlements will be paid to their owners. The vehicles themselves will be declared a total loss and will have “flood titles” issued against them with the intent of going to their graves in a scrap or parts yard.
