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Prior to the 2008 financial crisis, the NINJA loan, a form of a mortgage loan, was common in the US. The term "NINJA" stands for "no income, no job, no assets," and it refers to the fact that borrowers could get these loans without supplying documentation of their sources of income, employment, or assets.
NINJA loans were typically provided by subprime lenders, who specialized in obtaining loans for people with bad credit histories and little to no financial stability. Borrowers who couldn't qualify for conventional mortgage loans were drawn to these loans since they were frequently advertised with attractive interest rates and little requirement for a down payment.
NINJA loans, on the other hand, presented major risks to both borrowers and lenders because they were granted without confirming the borrower's capacity to repay. Several borrowers were unable to pay their mortgages on time, which caused a wave of defaults and foreclosures that exacerbated the financial crisis.
The financial crisis led to heightened scrutiny and regulation of hazardous lending practices, including NINJA loans, and many lenders went out of business or were bought by bigger banks.
