Once again it is different here.
That is correct. In the USofA they are called ‘Liar’ Loans we call them ‘low-doc’. However the outcome is much the same when the smelly stuff starts hitting the fan.
Fitch says self-employed borrowers have been hit hard, which has pushed arrears among prime low documentation loans to a record 3.97 per cent – slightly higher than the previous peak of mortgage delinquencies in this segment reached during the peak of the financial crisis in the December quarter of 2008.
This is a category of loans where borrowers meet the usual lending criteria, but are unable to supply sufficient evidence of their regular income, often because they are self-employed or contract workers with fluctuating earnings.
Repossessions at historic highs in Queensland and Western Australia and now prime low doc defaults at the same. We thought we were in the middle of a BOOM here ?
And it has only just begun…
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