On June 17, Joseph Cioffi moderated a panel of industry professionals on the state of subprime auto lending and securitization to coincide with the launch of our third annual 360 degree market study, Subprime Auto: Participants’ Expectations Moving on From 2020.
Highlights of the webinar include:
- Voluntary extensions and forbearances by lenders and servicers during the pandemic have helped borrowers bridge to a post-pandemic tomorrow. These actions have complimented government stimulus programs to underserved consumers, demonstrating good governance and social impact ESG criteria for investors to consider.
- Subprime auto securitizations have performed well during the pandemic thanks to a combination of deal structures, credit enhancements, and external factors such as the importance of vehicle ownership, which has led to high prioritization of payments, and high used vehicle values that have benefited from strong demand relative to short supply.
- The new administration is shifting the federal government’s approach to regulation, but the subprime auto market has faced such changing political winds before. Rather than make significant preemptive moves in anticipation of any new rules or enforcement actions, lender and servicers believe they have learned enough from past investigations and regulatory changes to adapt to what may come.
The market is optimistic after a year of challenges, but there are still issues to be wary of as we approach the light at the end of the pandemic tunnel.
- Joseph Cioffi, Chair, Insolvency, Creditors' Rights + Financial Products
- Ines Beato, Senior Vice President, US ABS - Global Structured Finance, DBRS Morningstar
- Sean Morgan, Vice President of Finance, Westlake Financial Services
- Clayton Triick, Senior Portfolio Manager, Angel Oak Capital Advisors