Western Funding restarts subprime loans
Western Funding Inc. has resumed buying car loans from dealerships after being bought out of bankruptcy by subprime specialist Westlake Financial Services.
Western Funding, a subprime lender based in Las Vegas, restarted loan originations this month after roughly six months without purchasing new loans, Vice President Bret Pangborn says.
The company filed for bankruptcy protection in September. Its assets were purchased by Los Angeles-based Westlake Financial at a bankruptcy auction in December.
"Westlake purchased designated assets of the old Western Funding, its portfolio, its loan platform and the name, and some additional assets beyond that," Pangborn said in a phone interview last week. Western Funding buys loans in all subprime categories, including deep subprime, Pangborn said. He said Western Funding uses its own scoring system, not FICO scores, to rate how risky a loan applicant is.
Western Funding was founded in 1962. It bought loans from about 3,000 dealerships in 33 states before it went bankrupt, the company said.
Westlake Financial Services does business with approximately 18,000 dealerships nationwide, about 30 percent of which are new-car stores.
The lender, which got its start in 1978 as the buy-here, pay-here division of Hankey Automotive Group, has been expanding steadily for the past few years.
Westlake nearly doubled in size in terms of revenues in two years, from about $267 million in 2010 to $509 million in 2012.
Marubeni Corp, a giant multinational trading company based in Tokyo, bought just over 20 percent of Westlake in 2011 in the form of stock valued at $250 million.
That investment accelerated Westlake's growth into prime and near-prime loans with new-car dealers alongside its original specialty in subprime loans with independent used-car dealers.
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