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Low-Doc Lending

This article is quite good on the interest that Low-doc lending is generating in Australia. Here in New Zealand a number of non-bank lenders are now offering low-doc loans successfully.

I am reminded that the business of lending is not being conservative, nor being aggressive, not even picking risks, but at its best it is simply ensuring that the right rate is charged for each risk. These days one might also add, and the right capital is matched to the lending.

I particularly liked the assertion that "Low-doc" is a marketing term. The right way to think of the loan is an "Equity loan" i.e. there is so much equity, and an appropriate risk premium, that they other information is less important.


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