liar loan
English
Noun
liar loan (plural liar loans)
- A mortgage loan in which the borrower made a statement of claimed income and assets which was not verified by the mortgage originator.
- 2007 November 23, Floyd Norris, “A Bad Loan by Any Other Name”, in New York Times:
- “The underwriting standards declined,” said Anthony S. Piszel, Freddie Mac’s chief financial officer. “That was across the board.” / Those who made loans and expected to sell them quickly did not care much about assuring that the loans would be repaid. It turns out that the financial wizards who made it easy to transfer risk also assured that more risks would be taken. They produced innovations like Nina loans, which, Mr. Piszel said, “found their way into prime space.” / Nina loans? / The abbreviation stands for “No income, no assets.” It does not mean the loans went to people without either assets or income, only that the borrowers were not asked if they had either. I had known about “stated income” loans — also known as “liars’ loans” — in which the bank took a borrower’s word for how much he earned. But I had not realized you could borrow money without even being asked about your income.
-
Synonyms
- stated income loan
Coordinate terms
- NINA loan
- NINJA loan