Blogging the Bookshelf

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NINJA loans -“The Big Short: Inside the Doomsday Machine” – Michael Lewis

July 28th, 2011 · No Comments · Economics, Policy

As early as 2004, if you looked at the numbers, you could clearly see the decline in lending standards. In Burry’s view, standards had not just fallen but hit bottom. The bottom even had a name: the interest-only negative-amortizing adjustable-rate subprime mortgage. You, the home buyer, actually were given the option of paying nothing at all, and rolling whatever interest you owed the bank into a higher principal balance. It wasn’t hard to see what sort of person might like to have such a loan: one with no income.

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