liar loans
No-verification home loans
Liar loans are mortgage loans made with little or no verification of the borrower's income, assets, or employment—applications where borrowers could exaggerate or fabricate financial information.
The term gained prominence after the 2008 financial crisis, when such loans contributed to widespread defaults.
Formally called stated-income or no-documentation loans, liar loan captures the moral hazard built into the arrangement.
- subprimeUnder top credit tier
- unverifiedNot yet proven true
- predatoryExploiting the vulnerable
- mortgageSecured home loan
- easy moneyProfit gained effortlessly
deception · dishonesty · housing bubble · housing crash · misrepresentation · default · bad debt · systemic risk · finance · borrower · credit crunch · too big to fail · risk · lending · scandal · financial crisis · adjustable-rate mortgages · fraud
- housing crisishousing bubble, housing crash, subprime mortgages, foreclosures, foreclosure