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Post by psychecc on Aug 19, 2008 15:25:39 GMT -6
The link to this excellent, comprehensive article, follows. 'Liar loans' threaten to prolong mortgage mess Mortgages allowed without proof of pay, assets default in record numbers The Associated Press updated 11:46 a.m. PT, Mon., Aug. 18, 2008 In the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job, and (no) assets."
The nation's struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.
"Those loans are going to perform very badly," said Thomas Lawler, a Virginia housing economist. "They're heavily concentrated in states where home prices are plummeting" such as California, Florida, Nevada and Arizona.
Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are now demanding full documentation of income and assets.
Losses on liar loans could total $100 billion, according to Moody's Economy.com. That's on top of the $400 billion in expected losses from subprime loans....www.msnbc.msn.com/id/26270434/
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Post by db on Sept 8, 2008 18:19:40 GMT -6
Liar loans for a liar's economy, thank-you Phil Gramm. Any more bright ideas for Keating Five, John McCain.
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Post by Grapple on Sept 9, 2008 5:24:03 GMT -6
And if anyone should know about ‘liar loans” then it would be Moody’s and the other rating agencies since they are the ones who rubber stamped AAA on them so they could rake in the fees and make record profits.
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