http://www.nytimes.com/2007/05/08/business/08lend.html A Cross-Country Blame Game By VIKAS BAJAJ Published: May 8, 2007
"The popularity of stated-income loans, derisively referred to as "liar's loans" by critics, seemed impervious to evidence that the loans made it easier for borrowers and brokers to commit fraud.
According to a report by the Mortgage Asset Research Institute, for example, one lender found in a sampling of loan applications that the incomes listed on 60 percent of the applications were, on average, 50 percent higher than those on the borrowers' tax returns.
Lenders liked the loans because they could be processed quickly. Loan officers did not have to verify bank statements, tax returns or other documents.
Borrowers also were charged a higher interest rate, often about 0.5 percentage point higher, making the loans more profitable."