BLOG FOR SPECIAL FINANCE CAR DEALERS
Triad Financial Ends Indirect Lending
As fallout from the subprime loan crises continues, the ripple effect claims another subprime car lender. Triad Financial Corporation announced last week that they would discontinue all indirect originations.
Asset-backed securitization becomes too expensive
For most subprime lenders, new loans are funded by the sale of existing contracts. In order to sell the existing contracts, lenders pool them. The pool of contracts is then insured for loss and securitized. With insurers wary of subprime loans, the cost of securitizing the loans has become more expensive, cutting into the profits of the loan pool. This high cost has led to Triad cutting back on lending by dropping its indirect dealer channel. This was explained in an email from Chris Goodman, senior vice president and managing director of the Roadloans division of Triad.
In the email he states, “Last week we announced that effective May 23, Triad Financial Corporation will cease all originations in its Indirect Dealer Channel. Conditions in the financial markets have been extraordinarily unstable, and have hindered our ability to adequately and cost-effectively fund future business through traditional methods including asset-backed securitizations. Triad has served the dealer community for more than 18 years, and values the relationships we have enjoyed with these dealers and the customers we share. Triad will honor existing approvals and fund eligible contracts forwarded to us through June 23.”
Goodman goes on to state that “Triad will continue to operate and fund loans in its Direct-Lending Channel, RoadLoans. Everything pertaining to business with RoadLoans.com remains “business as normal” with no changes to this operation. The company will also continue portfolio management operations at its corporate headquarters in North Richland Hills, Texas, with related customer care, loan servicing, loss recovery and remarketing functions there. In addition, Triad will continue to employ support staff in Texas and at its Huntington Beach facility.”
Comments (5)
June 26th, 2008 at 1:20 pm
I work for a credit union in Pennsylvania in the indirect lending department and I am in connection with someone who
developed an indirect lending blog in order to find
feedback from other people in the program. The blog
deals with pertinant information and up to date news
on the automobile industry. You can find it at
http://www.cuindirectlending.org/
We would like to invite you and any others in the indirect lending program to take a look and perhaps leave feedback on some of the topics. Thank you for your consideration.
Jodie Zeigenfuss
February 10th, 2010 at 12:21 pm
We are looking to start over and want to get a loan to help rebuild our credit. We need to get a bigger vehicle for our family what we have know isn’t working. Is their anyway you could help or direct us to someone who can help.
thanks
February 11th, 2010 at 6:07 am
Jenny, your best bet would be to visit our consumer site http://www.AutoCreditExpress.com.
On you complete the auto loan questionnaire we will match you with a local dealership that has lending programs available for your specific credit situation.
May 18th, 2010 at 4:46 pm
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June 6th, 2010 at 3:36 am
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