Alt-A

(redirected from Low-doc)
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Alt-A

Short for Alternative-A paper. Alt-A are loans that are considered riskier than prime loans but less risky than subprime loans. Generally made to individuals with a good credit score but some aspect of the loan (e.g. limited documentation or high loan-to-value ratio) makes the loan riskier than prime. Also see A paper, No docs.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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Indeed, in 1995, just as he was getting into the thick of the spread of low-doc loans, he founded Headlands Foundation, a nonprofit charity, in order, he said, to do things right.
In both cases, the share of low-doc loans increased over the years, as shown in Figure 6.
The mortgage industry's acceptance of risk in the form of low-doc no-doc and subprime housing loans, the securities industry's acceptance of the risk represented by the bundling of these loans into vast mortgage-backed debt obligations, along with their further acceptance of the risk represented by exotic, leveraged derivatives based on these same securities, has led to a meltdown of historic proportions.
Defined in its most simple terms, the subprime crisis refers to the overselling of housing to people who could not afford the house and/or interest rate, achieved by means of initial teaser rates followed by significant rate rises after a brief "honeymoon" period, often perpetrated through "low-doc" or "no-doc" loans or through actual mortgage fraud.
Lending practices such as low-doc and no-doc loans (where the borrower certifies their own capacity to pay) and asset-based lending enable loans to be provided with the creditor making few or no independent enquiries into the borrower's ability to repay.
A sampling of more specific forms includes alien employment certification, LOW-DOC application, company profile, and Freedom of Information Act request.
These innovative mortgages include adjustable-rate loans with deeply discounted initial rates, with monthly payments even lower than accrued interest (generating increases in loan balances), with relatively high loan-to-value and debt-to-income ratios, and with little or no documentation of a borrower's assets, employment, and income ("low-doc" or "no-doc" loans).
If you need a little more--say, $20,000-$100,000--check into bank loans, credit lines from banks, the SBA Low-Doc program, strategic partners and other sources.
With a simplified application process, a loan for as little as $500 can be acquired through OWBO's low-doc loan program.
Significant Low-Doc Composition: Low-documentation loans (80.6%) and specialist lending comprise a major proportion of the portfolio.
Significant Low-Doc Composition: Low-documentation loans (77.3%) and specialist lending comprise a major proportion of the portfolio.
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