I know, huh? And there I was thinking that easy credit and bad loans were a main contributory factor to our current economic doldrums (aren’t euphemisms grand?). But after the Fed changed its rules at the eleventh hour (behind closed doors) so that GMAC could avoid bankruptcy and become (of all things) a bank, after Uncle Sam pumped $6B worth of taxpayers’ money into the privately-held company’s coffers ($1B of which went straight to GM), the failed “bank” has reversed its reversal of its lax lending practices and opened the taps. “We want to do our part to support both the U.S. auto industry and individuals in the market for a car or truck,” said GMAC President Bill Muir, in a prepared statement. “GMAC now finances a broad spectrum of auto buyers, similar to traditional levels.”
Traditional? Is that what they call the “anyone with a pulse” financing that GMAC generated to keep GM (and then Chrysler) in Denialand? And now, with a gentle nod to accountability-free post-modern irony, GMAC will once again loan money to car buyers with FICO credit scores below 620. It will also increase allowable advance rates (120 percent loans are back and they’re bad!). And, just for S&Gs, they’ll reduce some financing rates.
“Over the next 60 days, GMAC will make available at least $5 billion in order to increase the flow of credit to U.S. automotive customers, Muir said.
60 days. Huh. Isn’t that the exact amount of time President Obama’s Task Force gave GM to get its shit together?
Equally uh, “interesting” (especially for conspiracy theorists who connect the dots between GMAC, Cerberus and former U.S. Treasury Secretary John Snow), GMAC is suddenly getting out of the business of putting GM and Chrysler dealers out of business.
During April, GMAC will eliminate “curtailment payments” designed to collect on dealer loans on unsold inventory. Through June, GMAC will waive the fee charged to dealers for posting unsold vehicles on SmartAuction (GMAC’s online marketing site). What’s more, qualified dealers (?) can defer wholesale interest charges for two 30-day periods during the next 120 days.
Tin foil hat at the ready, methinks someone is doing their level best to tilt the level playing field in GM’s direction. To what end I have no idea.
Selling working people a car without a 700 credit score is what made the business flourish!
Good for them!
Believe it or not,most people in a less than stellar credit rating will make the payments!
Go G.M!
Now you’ve got an edge!!!!
Well bad loans are a problem.
But there is a bigger problem when the bad loans are syndicated into securities, ratings folks say they’re AAA rated, insurance folks guarantee their value, stock folks sell them all over the world. Oh and I forgot, government agencies are promoting them with Congressional cheerleaders. Let’s hope none of this is happening.
The marketing practically writes itself… “Your denial gets you into a Denali!”
Has GMAC management found a conscious? After brutally savaging GM dealers (including my local long-time dealer)they are now going to be “nicer” to dealers? What a joke. Time for President Obama to clean out GMAC’s incompetent and overpaid executives and Board of Directors. While we’re at it, order Cereberus to give back GMAC to GM and cancel bank holding status. No more taxpayer dollars for GMAC/Cereberus. I’m sure GM dealers would love to see GMAC back at GM after the screwing they have taken from Cereberus over the last year. Of course, GM has been sitting idly by letting GMAC kill their less “creditworthy” dealers. Now they don’t have to buy them out or pay any more rebates to them. I have been buying GM cars for 25 years and after GMAC killed off my local dealer (in business for 35 years-unfortunately with a new GMAC-financed facility),I will no longer buy GM products. My next vehicle will be a Toyota. GM and GMAC need to learn not to mess with loyal customers in a rural small town. We will not forget how we got screwed. I want my portion of the GM and GMAC bailout refunded.
Nah, tced2, that’s a totally improbably scenario. People would have to be crazy to do those things.
OK, no doubt about it, this is Feinberg’s way of giving back. He’s a nice guy after all. I’m ashamed of myself for ever doubting him. Ditto for Snow. I’m sure this is just as it appears; no sneaky shit going on that we’ll figure out later.
“sub prime market” can mean alot of things now.
People who walked away from their properties because of declining house values got their credit shot to shit.
People who were decent responsible credit users who lose their jobs have their credit shot to shit – and quickly since the credit card companies have been pulling lines of credit like crazy (especially HELOCS)
I work in finances/Mortgages – I never make assumptions on people based on their credit score. That’s part of the reason America is in this mess now: the banks assumed people with 750 Ficals COULD AFFORD and be responsible to pay for homes on NINJA LOANS hahahah.
Memo to Obama: We weren’t just talking shit when we said that they never learn.
Selling working people a car without a 700 credit score is what made the business flourish!
Yes. In the same sense that Cocaine makes your well being “flourish”. For a while. Later it cames the depression and the paranoia.
GMAC is ready to roll up the dollar bill again, just after finishing rehab.
A is A: No,what oldyak is saying is that the average car buyer doesn’t always have a 790 or 800 point credit score.