In that sense, credit applications aren't much different from the so-called stated-income mortgages that came to be called "liar loans" during the subprime crisis.
But the tragedy is not that dishonest borrowers and brokers signed off on liar-loans, greedy bankers packaged time bombs, yield hungry speculators bet on AAA-rated trash or that pandering politicians let taxpayers guarantee mortgages in the first place.
These Alt-A mortgages include loans to people with spotty credit histories and so-called "liar's loans, " which do not require borrowers to fully document income or assets on their loan application.