patrick.net

From the article:
"Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan.

“I am not sure how I got the loan,” Mr. Durham, age 60, said.

Mr. Durham’s application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn’t worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car."

I have no sympathy for the car dealer, nor for Mr. Durham. The car dealer committed fraud and deserves jail time. Mr. Durham stopped working from age 37, sponging off the rest of us for the last 23 years. He is also stupid beyond belief. Let him drive a Ferrari.

Call it Crazy says

Strategist says

I have no sympathy for the car dealer, nor for Mr. Durham. The car dealer committed fraud and deserves jail time.

The car dealers don't care, they are sleazier then the mortgage companies. They just sell off the bad paper and let it be someone else's problem..

The institutions that buy loans from car dealers must be fully aware that massive fraud takes place at the dealership. Must be real profitable for them to continue with business as usual.

Call it Crazy says

The institutions that buy loans from car dealers must be fully aware that massive fraud takes place at the dealership. Must be real profitable for them to continue with business as usual.

I'm sure it is. But at least with car loans, many are repo'ed after only a few months of missed payments versus the banks that let people squat in the houses and destroy them for YEARS!!

The loans are also short term, large part of the payments are principal, and the loans are smaller, making it easier to pay off. They do not have the capacity to bring down the whole economy like mortgages can.

Strategist says

The institutions that buy loans from car dealers must be fully aware that massive fraud takes place at the dealership. Must be real profitable for them to continue with business as usual.

Flashback: http://dealbook.nytimes.com/2007/07/10/citi-chief-on-buyout-loans-were-still-dancing/
>>
But Mr. Prince used an interesting metaphor to describe his company’s situation as a major provider of financing for leveraged buyouts. “As long as the music is playing, you’ve got to get up and dance,” he told The Financial Times on Monday, adding, “We’re still dancing.”

An interesting article. A looong while ago, I noticed how sales were becoming secondary to lending. Make $1 on the sale, but make $3 in interest by selling to someone who doesn't have money. I've studied economic theory quite a bit, and this shouldn't happen, based on rational theory. But since people aren't rational (ie they're stupid, or at least uninformed) selling overpriced stuff on an outrageous payment plan works. Sad.

gsr says

But Mr. Prince used an interesting metaphor to describe his company’s situation as a major provider of financing for leveraged buyouts. “As long as the music is playing, you’ve got to get up and dance,” he told The Financial Times on Monday, adding, “We’re still dancing.”

I like that....as long as the music is playing. But what if the fat lady decides to sing?