A Liar Loan is a category of mortgages where borrowers are allowed to state their income and assets without providing any documentation to verify this information. These loans became notorious during the housing boom of the mid-2000s when many borrowers exaggerated their financial standing to qualify for larger loans.
Predatory lending refers to unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. These practices take advantage of borrowers' lack of knowledge and often result in borrowers being burdened with loans they cannot afford, high interest rates, and excessive fees.
