I attended the AFSA conference in Dallas earlier this month which is primarily attended by lenders that deal in the realm of sub-prime finance. The buzz seemed to be the difficulty that a lot of lenders are having in completing securitizations and/or selling off blocks of loans originated earlier this year. As the industry seems to move in trends, once again money has tightened up much like it did back in 1996 when some of the larger lenders sought relief under the protection of the Federal Bankruptcy Courts. Therefore, the time is now to reevaluate your portfolio of lenders to make sure you don't get caught with deals in the pipeline and a lender that's on their way out of the business, leaving your dealership holding the bag. Review the lenders your dealership is doing business with to see if there has been any slowdown in funding, or requests for out-of-the-ordinary stips that slow down the funding process but giving the illusion that the deal was submitted incomplete. Last, but not least, look very closely at lenders that have drastically changed their guidelines overnight without notice. Go back to the basics requalify your lenders and weed out the weak and dying the money you save may be your own.
Mark Hafner is Executive Vice President for Access Financial Services L.L.C. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3.