[Michael I]

1) It's crazy that companies even fund these deals and 99% of them just say they fund defaults to get ISO's to sign up.
2) Why focus on absolute garbage when you can focus on finding better deals that will last years in your renewal book? Even if a funding company is going to fund someone who is literally in debt collection asking to add more debt and another daily payment (which is such an oxymoron its almost hard to type that sentence and think its normal), I doubt that they sit at home joyfully thinking about funding these type of files. I'm sure they are WILLING to fund these really dangerous files but they would rather be funding deals that have at least a 1% chance of renewing.

I don't know for sure if what I'm saying is true but that would be my guess....

In a perfect world for a funder they can fund a guy 10 years in biz with 700 credit for 3 months 1.5 . however they can not , so now they have a decision to make of give better rates and terms or take worse paper, some took worse paper. than you have the yellowstones of the worlds giving better deals on the worse deals .5-7 months less fees etc. . so they made a decision again to take even worse than those guys . That left them with barely being able to fund, so they started to do crazy stuff like funding defaults.
I remember 7-8 years ago when all the A funders were doing 6-8 months 1.38 and than some started doing the 12-18 months deals . some funders joined , some became what we now call the b paper and some closed up. Same thing is happening now with the d-f paper