Liar's Loan

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Liar's Loan

A loan made to a person who has not been truthful about some aspect of the loan application. For example, if the borrower overstates his/her income, he/she is said to take out a liar's loan. In most jurisdictions, it is a crime to make false statements on a loan application.
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References in periodicals archive ?
Stated income loans began as a product designed to facilitate lending to individuals with difficult to document incomes: those working on commission, the self-employed, individuals with incomes that fluctuate from year-to-year, and other nontraditional borrowers.
At its peak, 88% of its HELOCs represented stated income loans. Also, at one point 18% of its HELOCs went to borrowers with credit ratings below 600.
The loans include interest-only mortgages, payment option adjustable-rate mortgages, and stated income loans.
Many business owners wonder how to get the loans they need from a mortgage provider they can trust when 100 percent financing is harder to find, downpayments are required for most loans, stated income loans are less available and many lenders are closing their doors after suffering the consequences of poor lending practices.