Posted By: Kathleen O. Blanchard
Fair Lending: Restricting Co-applicants - 01/27/03 09:42 PM
I posted this but need to change the situation based on additional info rec'd. Bank has an indirect auto lending area. When a dealership submits an ap on an individual with bad credit, there is always a co-applicant.
What do you think of a bank, for indirect auto loans only, requiring that co-applicants be either a relative or a member of the same household. If they live in the same house, the bank doesn't care if they are related, married, anything.
The problems arise when one of these people, usually the one who will actually be driving the car, is out of our market area or subsequently leaves our market area. The loan goes into default. The car is off in the hinterlands.
The car will be titled how ever they request it to be titled..could just be one borrower on the title. I would really prefer that these come in as co-signers, but the dealers are sending them in as co-aps.
The lenders feel the dealers advise the bad credit guy to just get someone with good credit to sign with them....there is no "notice to co-signer" because the application comes in from both.
I am struggling to come up with some ways to address the issue while complying with fair lending. I don't see why we would make a car loan to someone out of our market area. Perhaps we can limit that and eliminate part of the problem.
I am open to thoughts and suggestions.
What do you think of a bank, for indirect auto loans only, requiring that co-applicants be either a relative or a member of the same household. If they live in the same house, the bank doesn't care if they are related, married, anything.
The problems arise when one of these people, usually the one who will actually be driving the car, is out of our market area or subsequently leaves our market area. The loan goes into default. The car is off in the hinterlands.
The car will be titled how ever they request it to be titled..could just be one borrower on the title. I would really prefer that these come in as co-signers, but the dealers are sending them in as co-aps.
The lenders feel the dealers advise the bad credit guy to just get someone with good credit to sign with them....there is no "notice to co-signer" because the application comes in from both.
I am struggling to come up with some ways to address the issue while complying with fair lending. I don't see why we would make a car loan to someone out of our market area. Perhaps we can limit that and eliminate part of the problem.
I am open to thoughts and suggestions.