how a liar loan works
for certain low documentation loans such as stated income stated asset mortgages sisas income and assets are simply noted on the loan application on the other hand with no income no asset mortgages nina the lender doesn t even require you to disclose income and assets at all some liar loans take the form of ninja loans an acronym that means the borrower has no income no job and no assets these loan programs open the door for unethical behavior by unscrupulous borrowers and lenders and have been abused in the past they have resulted in borrowers taking on loans that they could not afford and facing foreclosure as a result 1low documentation and no documentation loans were originally designed for borrowers who have a hard time producing paperwork to verify their income and assets such as prior tax returns or else they might derive income from untraditional sources where such documentation is unavailable such as tips or a personal business low doc and no doc loans were meant to give individuals and households with nontraditional income sources the opportunity to become homeowners for example self employed individuals tend to not receive monthly pay stubs and might not have a consistent salary low documentation mortgages usually fall into the alt a category of mortgage lending alt a lending depends heavily on a borrower s credit score and the mortgage s loan to value ratio as tools to determine the borrower s ability to repay 2liar loans offer people with nontraditional income the opportunity to own property but they have been historically abused 