Consumer Loan Performance at CENTRIX Improves Faster Than National Rates
Portfolio Performance Rebounds After Costly Effects of Katrina, Bankruptcy Laws
CENTENNIAL, Colo., April 25 -- CENTRIX Financial announced today that its consumer automotive loan delinquencies have dropped to their lowest levels in more than two years. CENTRIX, which underwrites and manages subprime, or special auto finance, loans nationwide, is reporting dramatic improvement in loan repayments by its consumer base following the industry-wide delinquency spike late last year.
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"The CENTRIX portfolio saw higher delinquencies because of the economic effects of Hurricane Katrina, higher gasoline prices and the new personal bankruptcy laws that took effect in October," said Robert E. Sutton, Chairman and CEO, CENTRIX. "But through focused efforts on at-risk borrowers, we've not only been able to significantly reduce the delinquency rates, but to bring them down to their lowest levels in two years. And, we expect to see stabilization at those lower levels."
The company's rate of consumer loans that were 30 to 60 days past due plummeted 163% from a peak in October to the end of March. Delinquencies over 60 days fell more than 200% in the same time period.
"That's a dramatic improvement that reflects the innovation of our loan management and collections processes," said Kevin Barry, Executive Vice President, CENTRIX Loan Management Group. "While almost all lenders saw improvement after the extraordinary events of 2005, our improvements are among the industry's best."
Across the board, lenders saw improvement in consumers' delinquencies during the first quarter of 2006. A recent American Bankers Association Survey showed a 12.6% decline in credit card payment delinquencies and a 7.5% improvement in a composite of auto, personal and home-equity loan delinquencies from their peaks last year.
In addition to the economic hardship caused by the 2005 Hurricanes and higher gasoline prices (which disproportionately hurt subprime borrowers), the change in U.S. personal bankruptcy laws in October caused a dramatic spike in delinquencies. Before the new, more restrictive personal bankruptcy law took effect, 1 in 73 American households declared bankruptcy; after the law, 1 in 261 is doing so, according to Lundquist Consulting.
About CENTRIX Financial, LLC
Denver-based CENTRIX Financial is a financial services firm that offers innovative auto finance lending products. CENTRIX has underwritten 250,000 loans totaling nearly $4 billion since 1998 in partnership with 300 financial institutions and 7,000 auto dealers nationwide. CENTRIX Financial is the Official Auto Finance Company of NASCAR.
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