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Funny story about those alt-a defaults.



March 20, 2008 – Comments (6)

Housing wire reports that alt-a defaults are closing in on 18%. The thing is that these loans are not resetting yet. They supply a chart that shows that this three month period has the lowest rate of scheduled resets for the rest of the year. Apparently it has been suggested to Housingwire that 70% of all alt-a (liar loans) were fraudulent.

Shockingly, we learn that people who will lie with you... will lie to you!

(I hope I get to tell that to my grandkids) (I hope they listen better than the mortgage brokers grandparents grandkids did).


6 Comments – Post Your Own

#1) On March 20, 2008 at 9:14 PM, FreundInvesting (28.68) wrote:

What do you mean by "70% of all alt-a (liar loans) were fraudulent"?

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#2) On March 20, 2008 at 9:22 PM, lquadland10 (< 20) wrote:

Now the dollar will go up and just who is proping up our dollar. We are bankrupt just read my other blogs. Soverin wealth funds will have to step in. the g-5 or g-7 bankers are manipulating the market in my humble thinking. They just don't want people to withdraw their money from the banks because the whole system will crash. If they can't cover city bank can they cover any bank? The answer is no they can't. Even if it FIDC insured. Just the cold hard facts. The country is bankrupted. Do the homework. With this week's bailout's we are stone cold broke in my humble thoughts.  Pay cash for what you want and does anyone have savings to get you through the rough time?

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#3) On March 20, 2008 at 10:23 PM, devoish (65.08) wrote:


I agree. It seems that number might be 30% low.

Lq, My conspiracy theory goes like this: Why do you climb Mt. Everest...Because it is there. Why conquer the world... because you can. That is the goal of the capitalist right? To get all of everything.

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#4) On March 20, 2008 at 11:10 PM, StockSpreadsheet (68.47) wrote:

I'm pretty sure that the "70% of all alt-a (liar loans) were fraudulent" refers to the fact that since people didn't have to prove income, (hence the nickname "liar loans"), most people inflated their income when filling out the forms.  Stating that you made more than you did could be/is considered fraud, as you are incorrectly or "fraudulently" representing your income.  Since people claimed they made more than they did, they were given mortgages for more than they could afford.  Now that unaffordability is coming home to roost and they are losing the homes through foreclosure.


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#5) On March 21, 2008 at 3:29 AM, dwot (29.03) wrote:

That chart for resets actually looks encouraging.  2008 has less than 2007 had.  It doesn't get really bad again until 2009.

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#6) On March 21, 2008 at 9:26 AM, devoish (65.08) wrote:


It seems to me that 100% of alt-a loans have to be fraudulent on some level. They seem to be some combination of loans that were 1) collusion between a broker and borrower to commit fraud against a lender. 2) collusion between a broker and a borrower to allow continued tax fraud against the state and fed gov't. 3). fraud by a broker against a borrower and a lender by altering documents without the borrowers knowledge. 4) fraud by a borrower against a broker and a lender.


I think the gist of the article is to suggest that these 17.4% of borrowers basically were investing and will default as soon as making payments is no longer in their own best financial interest. The  resets have a very small effect on the decision so far. Their investment did not pay off, and now they want out as cheaply as possible. btw. Please start blogging on CAPS again. You are the smartest kid in the class, and I miss your blogs.

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