Aames Financial (AAM) - Undervalued or what??? Message Board

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Non-Tech : Aames Financial (AAM) - Undervalued or what???

AAM 10.60

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Nov 26 10:42 AM EST

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To: Flan who wrote (24)	5/15/1997 9:32:00 PM
From: yin li	of 510

Just in case anyone would be interested to know: loans granted by AAM are collaterized by 50-75% of borrower's real-estate property. Sub-prime lending backed up by real-estate is always gonna be lower risk (much lower) than high-rate auto loans. (On Motley Fool, I saw someone to wrap up all subprime money-lending businesses together as if all were competing with each other and carrying the same risks.) AAM's 25 to 50% safety margin seems more than ample to motivate AAM's borrowers to re-pay their loans; I personaly wouldn't like someone to take my house and sell it at below market. 20% below market should guarantee a quick sale leaving the lender with, at least, 5% to cover its costs. All in all, key to AAM's success is revenue (no need to over-worry about risk) and AAM seems to have plenty of it.

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