Grant Thornton seems to take on the worst clients. They've been featured by Hindenburg at three other companies [0][1][2], two of whom switched to them from E&Y [1][2], like Carvana.
> Around 2019, Wells Fargo was considering becoming Carvana’s second financing partner, according to a Senior Manager at Wells Fargo we spoke with:
> “Their underwriting practices were not something that we were particularly comfortable with. [...] In one anecdotal example, when we had someone look at a proof of employment or a pay stub, it did not look to be legitimate. So we had significant concerns about some of those controls. To say you work for a large company, your pay stub shouldn’t look like someone built it in Microsoft Word. It should have a little bit more substance to it and look more official.”
With standards this low, they should hit up Block/Square [3], it's a match made in heaven.
I have to wonder if the reason Ally has been buying fewer loans is purely market-based (the risk-reward for subprime is worse in a high interest rate environment, unhappy with rising delinquency rates, etc.) or if Carvana's standards have taken a dive.
Grant Thornton seems to take on the worst clients. They've been featured by Hindenburg at three other companies [0][1][2], two of whom switched to them from E&Y [1][2], like Carvana.
> Around 2019, Wells Fargo was considering becoming Carvana’s second financing partner, according to a Senior Manager at Wells Fargo we spoke with:
> “Their underwriting practices were not something that we were particularly comfortable with. [...] In one anecdotal example, when we had someone look at a proof of employment or a pay stub, it did not look to be legitimate. So we had significant concerns about some of those controls. To say you work for a large company, your pay stub shouldn’t look like someone built it in Microsoft Word. It should have a little bit more substance to it and look more official.”
With standards this low, they should hit up Block/Square [3], it's a match made in heaven.
I have to wonder if the reason Ally has been buying fewer loans is purely market-based (the risk-reward for subprime is worse in a high interest rate environment, unhappy with rising delinquency rates, etc.) or if Carvana's standards have taken a dive.
[0]: https://hindenburgresearch.com/eros-international-on-the-gro...
[1]: https://hindenburgresearch.com/crius-energy-trust-an-unsusta...
[2]: https://hindenburgresearch.com/lpp/
[3]: https://hindenburgresearch.com/block/