«Shiller essentially said
housing prices don't always go up like [they
did during the
bubble], so he was taking a contrasting approach,» Dunham says.
The lender recognizes that the borrower «could» be taking home more money than the IRS taxes, however,
during the
housing bubble of the 2000s many brokers used «no doc» loans as a tool to qualify a borrower even though they knew the borrower
did not meet income requirements (thus the name «liar's loan» came to be).