by Doron Levin
The Street
A peak in delinquencies by subprime borrowers is adding to concerns that the current strong automotive sales cycle in the U.S. could be facing obstacles.
Fitch Ratings reported that the rate of subprime automotive loans overdue by more than 60 days rose to 5.16% in February. It’s the highest rate in the post-financial crisis period, second only to a 5.96% rate in October 1996, Fitch said.
The high rate is troubling to credit analysts who noted that the packaging of auto loans into bonds and the sale of those securities to investors recalls the events that led to the mortgage and housing crisis in the middle of the past decade.