Liar Loans Face the Truth
Sure, it’s probably too little, too late. But blownmortgage.com reports that insurers are finally saying no to Liar Loans, which are mortgages that allowed
Jul 31, 20207K Shares876.6K Views
Sure, it’s probably too little, too late. But blownmortgage.com reportsthat insurers are finally saying no to Liar Loans, which are mortgages that allowed borrowers to state their income and assets without any proof to back it up. Shockingly, many people inflated the numbers, often with the help of their brokers, and lenders looked the other way. Now that insurers don’t want to touch them, the loans are probably gone for good, with a few exceptions.
The shame of it is that liar loans, before they were abused during the housing boom, served a purpose. They allowed people who were self-employed or who earned income in non-traditional ways to qualify for mortgages. It’s only when the lending industry decided to market them to borrowers for no other reason than it meant more volume and profit, did the loans get twisted and exploited. They became a major factor in the mortgage meltdown because they tanked so quickly.
So now a self-employed, first-time homebuyer will have a harder and more expensive time getting a mortgage. Another instance in this housing mess where the people who didn’t play the game are paying the price.
Camilo Wood
Reviewer
Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing.
Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers.
Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
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