Neutron Loans

A new term (to me) describing many of the sub-prime loans given over the last five years.

I learned a new term today reading an article in the New York Times (How Missed Signs Contributed to a Mortgage Meltdown).  The term is a neutron loan.  As in everyone knew he was being given a neutron loan which would kill the buyer and leave the house.  Another words, the buyer would eventually be forced to foreclose.

According to the article, most of the old-time brokers on Wall Street knew these were being given out left and right and seeded throughout the financial system in the form of securitized assets. 

Apparently, one guy, Jim Melcher from Balestra Capital figured it out and he’s now vacationing in Paris.  The rest of us are just left with the radioactivity.

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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Comments

  • MyKidsCallMeMom

    September 04, 2007

    Is that like Mortgage Servicing Fraud?

  • MyKidsCallMeMom

    September 04, 2007

    While fighting Predatory lending I found this site on Mortgage Servicing Fraud.

    http://www.msfraud.org/forum.htm

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