Texas Subprime Auto Lender Files for Bankruptcy

Tricolor Holdings – a subprime auto lender – has filed for bankruptcy amid allegations of fraudulent activity within warehouse lines. Auto ABS backed by Tricolor loans have started to crack according to Bloomberg. Demand in the subprime auto market has swelled the sector to over $80 billion in size – this spike has been largely financed by ABS market participants, where increasing demand for bonds could be fueling a fire of relaxed lending and underwriting standards.  

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