March 20, 2007 | posted by Michael Baxter in IABN |

While the UK’s biggest companies try to work out what to do with all their money, in the US the sub prime crisis seems to have hit a new dimension.

Sub prime mortgages are targeted at people with poor credit records. But, in the US, there is another type of loan too.

It’s called ’stated income’ loan, and requires no proof of income from the borrower at all. Some commentators have nicknamed the genre ‘liar’ loans.

According to Standard and Poor, the overall market for these alternative loans has increased five fold since 2003, and the market is now half the size of the sub prime business.

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