Crippled by the downward spiral of real estate prices, homeowners who signed up for "liar loans" in better times are now unable to qualify for legitimate mortgages.Liar loans are types of mortgages taken out with little or no amount of documentation. In other words, they're quick-fix loans approved without requiring proof of the borrower's assets or income.
Ninja loans, which is short for "no income, no job and no assets," is an extreme example of a liar loan that's causing major turmoil in the already tumultuous mortgage market.
According to the Associated Press, agencies like Fannie Mae and Freddie Mac have lost a combined $3.1 billion between April and June because of defaulted "liar loans."
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