liar's

Baydovskiy and others obtained a dozens of such loans - referred to as "liar's loans" in the industry, according to court documents - by grossly overstating clients' incomes on mortgage applications.

Seattle Post-Intelligencer: Local News 2011

We have discovered since the administration's initial loss estimates that it was common for the SDIs to lie about the liar's loans they originated, sold, and purchased.

William K. Black: No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem William K. Black 2010

The business practices that maximize the fictional reported income (e.g., making liar's loans to people who cannot repay their loans) maximize real losses and hyper-inflate financial bubbles.

William K. Black: Foreclose on the Foreclosure Fraudsters, Part 2: Spurious Arguments Against Holding the Fraudsters Accountable William K. Black 2010

Indeed, given the millions of borrowers that received liar's loans, even if the borrowers were all frauds we could not possibly prosecute all of them due to lack of resources.

William K. Black: Foreclose on the Foreclosure Fraudsters, Part 2: Spurious Arguments Against Holding the Fraudsters Accountable William K. Black 2010

Yet, in 2006 just about half of all mortgages originated were liar's loans.

William K. Black: Foreclose on the Foreclosure Fraudsters, Part 2: Spurious Arguments Against Holding the Fraudsters Accountable William K. Black 2010

What else could affect losses on liar's loans and CDOs backed by liar's loans?

William K. Black: No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem William K. Black 2010

First, since the administration's anti-regulators have spent nearly two years carefully not looking at the liar's loans and determining their true value and the true incidence of fraud, how is the administration estimating losses without the facts necessary to make estimates?

William K. Black: No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem William K. Black 2010

Fannie, Freddie, Lehman and many others falsely called their liar's loans "prime."

William K. Black: No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem William K. Black 2010

The failure of the secondary market meant that sales of CDOs and packages of liar's loans had to be individually arranged.

William K. Black: No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem William K. Black 2010

Since the time of the administration's initial loss estimates it has become indisputable that fraud was endemic in liar's loans and that liar's loans were not simply enormous, but also far more common than was originally reported.

William K. Black: No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem William K. Black 2010