Comments on: Wild Ass Rumor of the Day: F.B.I. to Investigate Car Loan Biz? http://www.thetruthaboutcars.com/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/ The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 22 Nov 2009 17:03:45 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: guyincognito http://www.thetruthaboutcars.com/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/comment-page-1/#comment-102726 guyincognito Wed, 30 Jan 2008 16:10:22 +0000 http://www.thetruthaboutcars.com/news-blog/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/#comment-102726 Yes but, the main difference is that not only were these loans made to anyone with a pulse but they were also made on false pretenses. I was just researching this and found a bunch of links on google from 2005 giving ARM FAQ's. They said, 'these loans start out with a teaser rate as low as 1.5% for 6 months and then will rise to around 3-4%. This rate should be constant for most of the loan and could even drop. The worst case scenario would be that it would rise to 9% briefly, which sounds high, but that would only happen if mortgage rates rose to all time highs, which is unlikely.' Then the banks proceeded to jack those rates up like crazy, despite the mortgage rates never cresting 7%, to 12% and even 18% and thus pricing people out their loan and then refusing to refinance to a fixed rate because they had been paying interest only and had financed more than the new appraised value of the house. I'm interested to hear the results of this investigation. In GM's case at most they encouraged people to take loans they really shouldn't have and sold them a car whose depreciation (which is moderately easy to ascertain) would outpace the payoff. Yes but, the main difference is that not only were these loans made to anyone with a pulse but they were also made on false pretenses. I was just researching this and found a bunch of links on google from 2005 giving ARM FAQ’s. They said, ‘these loans start out with a teaser rate as low as 1.5% for 6 months and then will rise to around 3-4%. This rate should be constant for most of the loan and could even drop. The worst case scenario would be that it would rise to 9% briefly, which sounds high, but that would only happen if mortgage rates rose to all time highs, which is unlikely.’ Then the banks proceeded to jack those rates up like crazy, despite the mortgage rates never cresting 7%, to 12% and even 18% and thus pricing people out their loan and then refusing to refinance to a fixed rate because they had been paying interest only and had financed more than the new appraised value of the house. I’m interested to hear the results of this investigation.

In GM’s case at most they encouraged people to take loans they really shouldn’t have and sold them a car whose depreciation (which is moderately easy to ascertain) would outpace the payoff.

]]> By: Robert Farago http://www.thetruthaboutcars.com/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/comment-page-1/#comment-102664 Robert Farago Wed, 30 Jan 2008 13:37:42 +0000 http://www.thetruthaboutcars.com/news-blog/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/#comment-102664 <em> Cowbell : Is there a second page to this story? I didn’t see anything about automotive loans. The article seems pretty specific that the investigations were about mortgages. </em> It's a rumor based on a story. And clearly identified as such. Cowbell :

Is there a second page to this story? I didn’t see anything about automotive loans. The article seems pretty specific that the investigations were about mortgages.

It’s a rumor based on a story. And clearly identified as such.

]]> By: Cowbell http://www.thetruthaboutcars.com/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/comment-page-1/#comment-102659 Cowbell Wed, 30 Jan 2008 13:30:06 +0000 http://www.thetruthaboutcars.com/news-blog/wild-ass-rumor-of-the-day-fbi-to-investigate-car-loan-biz/#comment-102659 Is there a second page to this story? I didn't see anything about automotive loans. The article seems pretty specific that the investigations were about mortgages. Is there a second page to this story? I didn’t see anything about automotive loans. The article seems pretty specific that the investigations were about mortgages.

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