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No Income No Job No Asset Mortgage (NINJA) Loans

A NINJA Loan is a nickname for very low quality subprime loans. It was a play on NINA, which in turn is based on the notation scheme for the level of documentation the mortgage originator required. It was described as a No Income, No Job, (and) no Assets loan because the only thing an applicant had to show was his/her credit rating, which was presumed to reflect willingness and ability to pay. The term was coined by Charles R. Morris in his book The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash.

Ninja mortgages were especially prominent during the U.S. housing bubble 2000 – 2007 but have gained wider notoriety due to the subprime mortgage crisis in July/August 2007 as a prime example of poor lending practices.

The term grew in usage during the 2008 financial crisis as the sub prime mortgage crisis was blamed on such loans. It works on two levels – as an acronym; and allusion to the fact that ninja loans are often defaulted on, with the borrower disappearing like a ninja.

The term was also popularized in the 2010 US film Wall Street: Money Never Sleeps by the character Gordon Gekko played by Michael Douglas.

No Income No Asset (NINA) or simply Nina Loan is a term used in the United States mortgage industry to describe one of many documentation types which lenders may allow when underwriting a mortgage.

NINA programs were created for those with hard to verify incomes (waiters, etc.) but in actuality have been popularly used in situations where aggressive mortgage lenders and brokers did not want any trouble qualifying otherwise non-qualifying loans,thus becoming a significant factor in the subprime lending crisis. A significant number of NINA loans were never possible for the applicant to repay because the applicant literally had “No Income or Assets” and have thus resulted in default.

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This article uses material from the Wikipedia article No Income No Asset, which is released under the Creative Commons Attribution-Share-Alike License 3.0.

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