To identify differences in expectations that could lead to disruption in the securitization market and ultimately impact auto lending to consumers, Credit Chronometer has conducted a survey of nearly 100 originators, investors, servicers, trustees and other securitization market participants. Participants' anonymous responses show disruption will be inevitable, unless market expectations are adjusted. Our report, Participants' Expectations Point the Way to the Future of Subprime Auto, provides a rare glimpse into perceptions and expectations of various groups across the market, which will help individual participants set their own expectations and stay ahead of market shifts.

Highlights of the report include:

  • There is broad consensus among participants on the outlook for subprime auto performance.

  • The universal performance outlook is impacting participants' views on the sufficiency of credit enhancements and the ability to achieve desired ratings.

  • One set of market participants expresses greater concern than all others regarding credit enhancement levels, especially for subordinated tranches.

  • Credit quality concerns center on one specific vulnerability of subprime borrowers.

  • Participants' views on risk do not necessarily reflect their own concerns, but rather concerns regarding others' perceptions and expectations.