Subprime Auto Lender Checked Income on Just 3% of Loans in Bond

The video discusses the practices of Santander, a major US subprime auto finance company, highlighting a Moody's study that found only 3% of borrower incomes were verified in a $1 billion bond deal. This raises concerns about creditworthiness and potential delinquencies. The video also examines the growth of auto debt, which has nearly doubled since 2011, and the rise in delinquencies despite a strong job market. The lack of income verification by Santander could lead to increased delinquencies in the future.

What percentage of borrowers' incomes did Santander verify for a $1 billion bond deal?

• 50%

• 25%

• 3%

• 10%

By how much has the total volume of auto debt increased since 2011?

• It has remained the same.

• It has decreased by half.

• It has tripled.

• It has doubled.

What is the current total volume of auto debt in the US?

• $700 billion

• $1.3 trillion

• $500 billion

• $2 trillion

What is the current status of auto loan delinquencies?

• They have decreased significantly since 2012.

• They have remained stable since 2012.

• They are at their highest since 2012.

• They are at their lowest since 2012.

What concern does Moody's have regarding Santander's income verification practices?

• It may decrease the overall loan volume.

• It may increase the number of approved loans.

• It may result in inaccurate creditworthiness assessments.

• It may lead to higher interest rates.