hie,

can any one provide me the detailed information about low documentation loan. Also guide me how can i make a model for this product?

thanks

Not really sure what your question was. As far as low documentation loans go, it's a pretty broad subject. Conforming lenders offer versions of this, with "streamline" refinances, although some lenders, such as Countrywide, etc. also offer stated income loans with minimal documentation.

Nearly every subprime wholesale lender offers a wide range of loans, with interest rates adjusting according to the risk factor. The less documentation, the higher the risk.

No Doc- No income or employment is disclosed or verified.
NINA- same as no doc, but assets are not disclosed or required.
Stated- income is stated to meet qualification guidelines, and employment (not income) is verified
SIVA- stated income, verified assets
Lite Doc- 6 or 12 months bank statements, deposits used as income. # of statements depends on lender guidelines.
* Some lenders accept 12 or 24 months' bank statements as Full Documentation.

If you are a broker and wish to market these programs specifically, your best bet is to contact your favorite subprime account executives and ask them directly what type of stated, no doc, and alt doc programs they offer, and become familiar with the loan to value limits and credit score requirements, as there is really no "standard" throughout the industry. Different lenders have different requirements.

Good Luck!

hey...anyone know how to develop a model which can predict default for low doc loan?

Should I use Altman's zeta model or KMV EDF model? Why?