Low-doc rears its ugly head

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From The Australian:

LOW-DOC loans — or “liar’s loans” as they are known in the US — have become even easier to obtain as lending standards ­loosen, with non-bank lenders ­aggressively spruiking the controversial products by slashing interest rates and offering cashback giveaways and cruises.

The loans, which do not ­require borrowers to provide tax returns and are used by tax-avoiding small business owners, have traditionally carried interest rates substantially above standard loans.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.