Liar Loan
A liar loan is a type of loan in which the borrower provides false information on their loan application. This type of loan is also known as a “no-doc” loan, as the borrower does not have to provide any documentation to support their claims. Liar loans were popular during the housing boom of the early 2000s, as lenders were willing to approve loans without verifying the borrower’s income or assets. These loans were often given to borrowers with poor credit, as the lender was not required to check the borrower’s credit history.
History of Liar Loans
Liar loans were first introduced in the early 2000s, as lenders sought to increase their profits by offering loans to borrowers with poor credit. These loans were attractive to lenders because they did not require any verification of the borrower’s income or assets. As a result, lenders were able to approve loans to borrowers who would not have qualified for a traditional loan.
The popularity of liar loans increased during the housing boom of the early 2000s, as lenders were willing to approve loans without verifying the borrower’s income or assets. This led to an increase in the number of subprime loans, which were loans given to borrowers with poor credit. As the housing market began to decline in 2007, the number of subprime loans began to decrease, and the number of liar loans began to decline as well.
Comparison Table
| Type of Loan | Verification Required |
|---|---|
| Traditional Loan | Yes |
| Liar Loan | No |
Summary
Liar loans are a type of loan in which the borrower provides false information on their loan application. These loans were popular during the housing boom of the early 2000s, as lenders were willing to approve loans without verifying the borrower’s income or assets. As the housing market began to decline in 2007, the number of liar loans began to decline as well. For more information about liar loans, you can visit websites such as Investopedia, Bankrate, and The Balance.
See Also
- Subprime Loan
- No-Doc Loan
- Mortgage Loan
- Interest Rate
- Credit Score
- Debt-to-Income Ratio
- Loan-to-Value Ratio
- Adjustable-Rate Mortgage
- Fixed-Rate Mortgage
- FHA Loan
