Fitch Ratings said today that the strengthening wholesale value market helped bolster auto ABS-asset values and overall performance, year-to-date, keeping a lid on loss severity and loss rate-for now. The agency said the outlook for 2013 asset performance is stable while the rating outlook is positive.
Fitch said Prime annualized net losses, or ANL had crept up three percent in August over July’s level but the increase was much less than what’s usually seen during this period. Fitch also reported strong used vehicle values in August, calling that ‘not typical’ for that month.
Overall the agency reported that August Prime, 60-day-plus delinquencies were 0.33%. That’s unchanged from July. It’s also 10.8% lower year-over-year. Prime delinquencies have averaged 0.34% in 2013, down from 0.39% in 2012.
Meanwhile, subprime 60 day plus delinquencies were stable month over month at 3.21%. That’s 2.6% above July, but essentially unchanged year over year.
But, subprime annual net losses did jump 18.4% month over month to 5.27% in August, but were still 1.0% below August 2012.
Mike is correct. True underwriting would identify the opportunities and then use specialists to fine tune the results. However, laziness and the quest for operational cost reduction were part of the ingredients of the house of cards built by reliance on esoteric formulas designed by geeks and not by subject matter experts.
Just remember, that most of these systems are like driving a car by using only the rear view mirror as the guide.
I am waiting for FairIssac to explain why the loss results of lenders using their systems did not perform as predicted;or, are they saying that the lenders wanted the loss rates associated with their asset sourcing over the last 5-6 years.
In lending, adversity is the true test of the quality of manangement. Stupid in = stupid out.