HOUSTON — Many subprime lenders are tightening their business and trimming back on dealer relationships, which is a boon to buy-here, pay-here dealers as many customers who normally went the more traditional finance route are now being pushed into these stores.

“Subprime, if it’s not dead, it’s on life support,” said BHPH dealer Ingram Walters, who co-hosted the recent National Alliance of BHPH Dealers’ Underwriting and Collections Conference with Ken Shilson, founder of the group.

“It’s like subprime has gone away. Thirty-eight people came into a relative’s store (traditional dealer) and couldn’t get financed,” he explained to attendees. “Only two were approved.”

So with this influx of customers, there are a few things Walters thinks BHPH dealers should keep in mind.

“Do we need to get away from weekly payments? Do we have to collect them differently? Maybe give a rate reduction?” he asked, saying that customers are used to paying lower APRs and paying differently with more traditional lenders.

Also, he indicated, “Gas prices are going to help our customers since they’re now half price. We’ve survived (the) subprime (boom).”

For the full story go to http://www.subprimenews.com/spn/news/story.html?id=853

Mike Sheridan, President of Global Debt Network was interviewed last week on Biz Radio about the state of the credit market and how it is affecting the auto finance industry.

Biz Radio Podcast Part 1

Biz Radio Podcast Part 2

Source: ABAlert.com

A buzz is emerging that regional banks and financing shops
are increasingly seeking buyers for auto-loan portfolios they
originally intended to keep on their books.
The identities of the companies putting loans up for grabs
isn’t clear, but lenders that fit the profile to be sellers include
Huntington National of Columbus, Ohio, and PNC Financial of
Pittsburgh. Potential buyers include hedge funds and financial
institutions, both of which might view securitization as an exit
strategy down the road.
Trading hasn’t surged along with the number of offerings,
however, as bids are coming in below sellers’ expectations.
Nonetheless, the talks add to an ever-growing list of detours
that lenders have taken from their usual funding strategies
amid the credit crunch. Many of the portfolios are being
pitched by shops that planned to retain the receivables, but
now need to raise money after seeing other sources of liquidity
choked off. A good number of those outfits want to shed the
risk associated with any type of consumer credit, while others
need to make room on their balance sheets to write new loans
— often at higher interest rates and with bigger down-payment
requirements.
The heightened activity also adds to a slow development
that has been taking place in trading of auto credits as whole
loans in recent years. Take, for example, the business of Global
Debt Network Automotive — the 4-month-old operator of an
online platform for sales of small and mid-size auto-loan portfolios.
The Alamo, Calif., company initially expected dealerships
to account for most of the sales on its system. But bigger
portfolios have since taken over, including a $24 million subprime-
loan book put in play by a Michigan finance company
and a $26 million package of prime-quality credits.
Global Debt Network founder Michael Sheridan said his
company is engaged with 60 sellers, about half of which are
dealerships. The rest are split among finance companies and
banks. “We have had significantly larger portfolios on our system
than we ever thought,” Sheridan said.
No one has closed a sale via Global Debt Network yet. There
has been a lot of back-and-forth between sellers and buyers
though, with bids coming in about 20% below asking prices.
The sellers using the platform generally remain anonymous,
as they don’t want to be seen as desperate for cash. Still,
their presence highlights how funding strategies have shifted.
“In the past it’s been an originate-and-hold model,” Sheridan
said. Now, “cash is king.”
As for securitizations of auto loans, the sector has been in a
deep freeze along with the rest of the debt market. No issuer
has completed a deal since AmeriCredit sold $376 million of
subprime-loan securities a month ago, according to Asset-
Backed Alert’s ABS Database. However, several lenders are in
line to float transactions once conditions improve. v

Source: Special Finance

Nov 05, 2008

ALAMO, Calif. and LOS ANGELES — Finance companies from Michigan and Pennsylvania and auto dealerships from Texas and North Carolina are among the latest companies to post seasoned auto loan portfolios for purchase using Global Debt Network Automotive (GDNAuto), the company announced.

GDNAuto is the first online loan portfolio transaction platform where automobile dealers, banks, credit unions, finance companies, hedge funds and other financial institutions can come together to securely evaluate, price, sell and purchase asset-backed debt.

“At a time when auto finance is undergoing a period of intense and rapid change, GDNAuto brings transparency, efficiency and cost savings to transactions involving asset-backed auto debt,” said Michael Sheridan, founder and president of GDNAuto. “Both portfolio buyers and sellers are finding that GDNAuto provides valuable pricing data and opens the door to new opportunities to improve liquidity.”

Among the portfolios currently listed on GDNAuto:

· A $24 million subprime auto loan portfolio is offered by a Michigan-based finance company. The 2,048 loans have been seasoned an average of 14 months and carry a weighted average APR of 22 percent.

· A $4.8 million portfolio of 408 subprime loans seasoned for an average of four months is listed by a finance company based in Pennsylvania. The loans have a weighted average APR of 21 percent.

· A Texas auto dealership is offering a portfolio of 164 seasoned loans valued at $3.6 million. The subprime loans have been seasoned an average of six months and have a weighted average APR of 23 percent.

· An auto dealership in North Carolina has posted a portfolio of nine loans seasoned an average of nine months and with a weighted average APR of 25 percent. This subprime portfolio is valued at $21,000.

Developed and tested in collaboration with automobile dealers, dealer associations and portfolio buyers, GDNAuto uses an innovative online control panel that enables loan originators or portfolio owners to list and price the seasoned loans they want to sell to pre-screened banks, credit unions and other investors.

Two new portfolios have just been listed on GDNAuto, the first online marketplace where dealers and finance companies come together to buy and sell auto loan portfolios.

$24 Million Portfolio from Michigan

A related finance company is offering a $24MM subprime portfolio with 2,048 loans. The portfolio has a weighted average APR of 22% and the loans are seasoned an average of 14 months.

$21,000 Portfolio from North Carolina

A NC dealer is offering a $21K subprime portfolio for sale. The 9 loans have a weighted average APR of 25% and are seasoned an average of 9 months.

To view these loans in more detail as well as the additional 7 portfolios listed for sale, please log in to your GDNAuto account. If you do not have an account, it takes just a couple of minutes to sign up. THERE IS NO COST FOR MEMBERSHIP.

Dealers and auto debt sellers -  the GDNAuto transaction team is standing by to help you list your portfolio for sale.

Auto debt buyers and finance companies - GDNAuto is a risk free solution for you to source new deals and dramatically reduce transaction costs.

Upon seller’s acceptance of a conditional bid, a buyer can perform due diligence from the comfort of his/her office. All loan information is delivered to the buyer’s email inbox at NO COST to either party.

In the past two weeks GDNAuto has welcomed over 20 new members. We now have over 50 sellers and 60 buyers. We strive to provide you with a safe, efficient and profitable auto loan sales network.

Cash flow is key during these volatile times. In addition to the  portfolio data in these email updates, we want to share some tips to help you put your best foot forward in the GDNAuto marketplace.

Source: SubPrime Auto Finance News

LOS ANGELES and ALAMO, Calif. — Global Debt Network Automotive and CU Lending Solutions have formed a partnership that can allow credit unions to expand their reach into the auto lending business and manage their portfolio risk more efficiently.

Basically, the partnership between the two companies is designed to let credit unions tap into the growing non-prime segments. Moreover, it allows credit unions to buy and sell loan portfolios beyond their local area.

In essence, CU Lending Solutions works with credit unions and finance companies to help them develop, build and operate auto lending businesses.

Meanwhile, GDNAuto, the online loan portfolio marketplace from Global Debt Network Automotive, allows dealers, banks, credit unions, hedge funds and other financial institutions to securely evaluate, price, sell and purchase asset-backed debt.

“As more Americans seek out used vehicles, dealerships need new financing partners to help them serve a much larger universe of customers and offer a far more diverse set of loan products than they have in the past,” stated Mike Sheridan, founder and president of GDNAuto.

“At the same time, credit unions and finance companies are discovering there are ways they can serve this population and do so quite efficiently and profitably by selling their seasoned loans or balancing their risk by purchasing loans from other geographies,” he continued. “Global Debt Network is a convenient online marketplace where dealerships and lenders and investors can turn to help meet their business goals.”

Frank Mercer, president and chief executive officer of CU Lending Solutions: ”Increasingly, credit unions are more comfortable reaching out to serve this population of borrowers because they have access to an array of tools, services and resources that help them connect with new dealerships and better manage the financial and operational risk associated with indirect, non-prime loan portfolios.

“This partnership extends the market reach of both companies and provides auto dealers and lenders with an efficient way to originate more loans and convert the seasoned loans they have originated into cash to fund their operations,” he added.

Source: Special Finance

Oct 14, 2008

ALAMO, Calif. – If a new partnership between Global Debt Network Automotive and CU Lending Solutions LLC goes as planned, credit unions across the U.S. will have new opportunities to expand their auto loan business. The GDNAuto platform will allow credit unions to tap into fast-growing nonprime segments and extend their reach and income stream beyond their local geography by selling and buying seasoned auto loan portfolios, according to Mike Sheridan, GNAuto’s founder and president.

“As more Americans seek out used vehicles, dealerships need new financing partners to help them serve a much larger universe of customers and offer a far more diverse set of loan products than they have in the past,” Sheridan said. “At the same time, credit unions and finance companies are discovering there are ways they can serve this population and do so quite efficiently and profitably by selling their seasoned loans or balancing their risk by purchasing loans from other geographies.”

CU Lending Solutions works with credit unions and finance companies custom-develop, build and operate auto lending businesses that deliver sustained value. By accessing the GDNAuto platform, banks, credit unions, hedge funds and other pre-qualified investors can use their own secure filtering tool to specify the types of loans they want to buy. Investors can review dealership portfolios, select the loans they want and submit a bid for consideration, according to GDNAuto.

“Increasingly, credit unions are more comfortable reaching out to serve this population of borrowers because they have access to an array of tools, services and resources that help them connect with new dealerships and better manage the financial and operational risk associated with indirect, non-prime loan portfolios,” said Frank Mercer, president/CEO of CU Lending. “This partnership extends the market reach of both companies and provides auto dealers and lenders with an efficient way to originate more loans and convert the seasoned loans they have originated into cash to fund their operations.”