Question

A ____________ loan is that which deliberately misstates the qualifications of a borrower to push a loan through the approval process.

a. NINJA
b. liar
c. subprime
d. home equity

Answer 1

A subprime loan is a loan that deliberately misstates the qualifications of a borrower to push a loan through the approval process. It has characteristics like low or zero down-payment and little scrutiny of the borrower's income. Some financial institutions made these subprime loans, known as NINJA loans, in the mid-2000s.

Step-by-step explanation:

A subprime loan is that which deliberately misstates the qualifications of a borrower to push a loan through the approval process. It has characteristics like low or zero down-payment, little scrutiny of the borrower's income, and sometimes low initial payments followed by higher payments later. In the mid-2000s, some financial institutions made these subprime loans known as NINJA loans, which were granted even though the borrower had no income, no job, or assets.