Who in the world came up with the concept of NINJA loans?

I had never heard of such a thing until today. Is is any wonder that the banking industry is in the mess it's in today? :eyes:

Do you have any context?

and the person mentioned these things.

"Michael from Bedford, N.Y. writes:
In 2004, when Bush ran against Kerry, he always made a special point of celebrating new home ownership. Being a realtor at that time I saw the “NINJA” loans (no income, no job, no assets) being given and I wondered how the inevitable failures would be spun. Yesterday I saw. McCain who has always been against strong government oversight for the lending business has changed his mind and is railing against the greed. What a clown!"


http://caffertyfile.blogs.cnn.com/2008/09/18/will-the-financial-crisis-affect-your-vote-in-november/#comments

It is essentially an unverified loan to someone that just tells lender what he makes without providing any documents.

They were pretty common out here in Central California. The worst were the 110% NINJA I/O loans. Not only did they give homes to people unqualified to hold them, but they covered closing costs and gave them cash back to buy furnishings and electronics. They were GIVING MONEY AWAY in every sense of the term.

in essentially an unregulated market, the lender no longer had a real incentive to make sure the loan was paid back. They made their money by selling the paper, not from the interest on the loan being repaid. Once that incentive was gone, they could care less whether the loan was risky.

And stealing from the taxpayers who have to bail these banks out.

In fact, it pervades the industry for all kinds of 'paper' from common stock to bonds to derivatives. When people seek to 'turn' the paper and game the system (or play the Greater Fool strategy), there's no motivation to ensure that underlying value exists. It also corrupts the companies themselves. I've seen (close up and personal) the "scorched earth" executives that wreak havoc in a company in order to push the numbers ... but destroy the more intangible strengths of the company's 'culture'. Carly Fiorina can be regarded as one of those kinds of executives. The damage she did (with help, of course) to H-P is incalculable. George Scalise is another one (even better example) of those executives.

That's how I got my 10R!

:-)