FANNIE MOTORS - JOHN BERLAU
Washington Free Beacon: Subprime Loans Are Back Thanks to GM
The banks may enjoy short-sighted profits as more cars leave the lots, but the system could come crashing down if borrowers begin to default. The trend of risky lending practices began with bailed-out GM.
The increase in securitization has coincided with GM’s acquisition of AmeriCredit, one of the nation’s largest subprime auto lenders, which it renamed GM Financial (GMF).
“It’s becoming Fannie Motors,” said Competitive Enterprise Institute finance scholar John Berlau. “They’re still using our tax dollars to break into exotic and money-losing propositions from Chevy Volts to subprime loans, both of which could literally and figuratively blow up in their faces.” > Read more
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