The NINJAs Are Back: Buy Life Insurance, Get A No Doc Mortgage Loan For Free

Tyler Durden's picture

First we got GM subprime interest-free car loans,  then we got subprime ABS securitizations, then we got soaring student loan defaults and delinquencies, then we got the opportunity to sell and short student loan exposure, and now, finally, the credit bubble is complete as FastFunds Financial Corporation is proud to announce that it has acquired exclusive mortgage servicing rights for an "Innovative New Mortgage Product." Why is it so innovative? Because it requires no credit verification, no credit history, no docs and needs no personal guarantees. In other words, it is the very worst of the worst lending practices we saw in 2006: the NINJA.

But there is a twist: "all that is required to qualify for a mortgage loan is qualifying for a life insurance policy, a down payment that usually amounts to 10% of the purchase price and verification that the borrower has the financial ability to pay the monthly payments."

In other words: buy life insurance, get a subprime, no doc mortgage for free.

Ye olde days are truly back.

From the FastFund credit bubble peak press release:

NET LIFE is a development stage enterprise that has developed and is offering an innovative new mortgage product that is not based on credit history (no doc) or personal guarantees. It is only secured by the underlying collateral and a life insurance policy on the borrower. Therefore, all that is required to qualify for a mortgage loan is qualifying for a life insurance policy, a down payment that usually amounts to 10% of the purchase price and verification that the borrower has the financial ability to pay the monthly payments. NET LIFE believes this mortgage product will be attractive to a wide spectrum of potential borrowers including:

  • first time homebuyers;
  • borrowers who have experienced prior financial difficulties such as foreclosures, bankruptcies, late payments or credit problems; are presently employed and whose current income would qualify for a mortgage loan; but who couldn't otherwise qualify; and
  • borrowers who may wish to bypass the traditional paperwork involved in the typical underwriting process but who would otherwise qualify.

Since its formation in 2012, NET LIFE has completed development of its mortgage product and conducted testing via a limited number of successful closings. NET LIFE is now developing plans for a national launch of its product line.

"We are excited to be on the forefront of launching this exciting new product and especially being on the servicing side where we can gain substantial benefit without the risk associated with traditional mortgage underwriting," stated Barry Hollander, acting Chief Executive Officer of FastFunds.

* * *
We, on the other hand, are just as excited to sit back and watch how this time the most speculatcular credit bubble ever created with the full complicity of every central banker in the world "will be different" and have a different outcome than the last time...

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Lost Wages's picture

If you don't pay do they just kill you and collect on the insurance?

Laser Shark's picture

And sell your organs on the black market.

TruthInSunshine's picture

"Dope credit" (aka "credit crack") expansion is an essential, critical component of Bernanke's continued "reflation of spectular asset bubble classes recovery plan," which is all part of the historical track record of central reserve fractional fiat banks "old standby" game plan of blowing & enticing "investors" to chase said bubbles.

Modern Monetary Mechanics (Modern Monetary Theory simplified) = When an economy no longer produces net-positive incremental units of productive value, kick the can by inflating & reflating alternative asset classes to batshit crazy levels, and sometimes, as in the current period, inflate nearly every asset class imaginable to batshit crazy levels, simultaneously, by punching The Easy Button that the Fed uses to monetize debt/print fiat.

  • The Federal Government (via FHA, meaning taxpayers will stuck for the default boom once again) is guaranteeing 90% of all new home mortgages with 3.5% down non-conventional mortgages - FHA inches closer and closer to bailout
  • The trillion dollar Student Loan Bubble is well underway; expect massive levels of default, with taxpayers to pick up the tab


All's well that ends well, and for that which ends badly, well...

ihedgemyhedges's picture

This'll be great!!  Once Fannie and Freddie have their love child, we can get it to do the mortgage and AIG to handle the life insurance..........ahhhhhh, memories.........

Stackers's picture

Next we get robo-contract killing as Net Life tries to get all its money back through life insurance policies ?

EscapingProgress's picture

Obozo the President Clown is going to fucking drone you if you don't pay up!

P.S. This whole thing (student debt, ninja debt (is that redundant?), stawks, etc.) blows up right before Obozo leaves the House.

A Nanny Moose's picture

Drones are too obvious. Government runs the healthcare system, which has the means of "liquidating" "non-performing"Government backed lending, wherein one is worth more dead than alive. Since Government courts will adjudicate the entire process, I suppose everything is within the realm of possibilities.

What could go wrong?

BidnessMan's picture

Big news story about antibiotic-resistant bacteria comes out at the same time. Coincidence??

Blano's picture

Right after, because then it will be blamed on the Republican(s).

BidnessMan's picture

But who is the "Baby Daddy"?

Mark123's picture

Where is 60 minutes?  Why not send in an illegal immigrant, working as a dishwasher, etc and get them to apply for a mortgage....and video the whole process?  OH,. forgot, they are too busy dealing with important stuff.

All Risk No Reward's picture

>>game plan of blowing & enticing "investors" to chase said bubbles<<

Whoever originally posted that link is a genius.

Son of Loki's picture

EZ-Credit (zero down, no doc stuff) is the sine qua non of Bubbles. The system is alreayd in place for keeping any profits and then Fast & Furiously passing all losses onto innocent society.

ZerOhead's picture

No no no... it's not like that. Barry is legit. And a big kahuna in Chinese solar energy apparently...

indygo55's picture

Its all in the fine print.

PersonalResponsibility's picture

My first thought.

If only those pesky property taxes would go away, how booming the mortgage market would be.  The fed needs to get on that, stat... please


DosZap's picture

Dude get real,

My first thought.

If only those pesky property taxes would go away, how booming the mortgage market would be.  The fed needs to get on that, stat... please


The next step to raising taxes is DISALLOWING the home mort int deduction, and charitable donations!!!!!!!!!!.


Besides, if they did away with those taxes, when it was paind off, you would OWN right to own property in  the USA anymore.

Dr. Engali's picture

They should wrap up your burial plot and casket in with the deal for a complete package...The rest of your life mortgage .....Never worry about where you will find rest again.

Clayton Bigsby's picture

I'm gonna buy be a house w/ 3% down - thanks FHA! - lever that motherfucker for all it's worth, get me all the physical gold I can carry, and the rest of the world can kiss my ass....

Quit Your Bitchin's picture

Even better, I just got a VA loan with 0% down, no PIM and its even secured with your tax dollars. HA HA!

Missiondweller's picture

Just my opinion, but if you served in a combat zone- you deserve it.

otto skorzeny's picture

volunteering to do the dirty work for the banks and big oil doesn't earn anyone anything other  than scorn and it sure as shit shouldn't give a person priority when it comes to getting a job or getting a mortgage.

Panafrican Funktron Robot's picture

I would buy what you're selling here if the mercs were paid a fair market rate for their services.  As it stands presently, it's pretty close to indentured servitude.  

Mentaliusanything's picture

And as I read this, I thought to myself there "Should be a law against this" and dont we have regulators who Police this shit. Then I wiped the shit of my ass, laughed and flushed.

Thus endith the lesson.

Shit either floats or sinks. but you can bet it stinks.

Your welcome!

fonzannoon's picture

I'm sure these life insurers are choking to death on zirp. They will gladly take your premium today to buy themselves another 5 minutes of existence.

NoDebt's picture

You ain't just kidding with that comment, Fonz.  There are life insurance policies blowing up all over the place right now (expected returns not paying for the premium increases as people get older, to over-simplify the situation). 

My father (73) had his "hit the wall" this year.  Payments went from $600 to $850 and were expected to be $1200 by 2014.  I asked him, pretty please with sugar on top, to find the original projections from when he bought the policy in the late 80s..... just so I could show my clients how these things can go horribly wrong vs. the serious-looking "projections" that are, in fact, nothing more than sales propoganda.  He couldn't find it, unfortunately.  I would have paid his premimum for the next year if he could have!

Those projections are always built on unrealistic return expectations, but some of them are REAL whoppers.  Like 11% CAGR.  Can you imagine?  Run the same projection on a 2% CAGR (which just about covers the M&E fees)..... it's so bad you can't do anything but laugh.

If you REALLY want to leave something for your next of kin, take what you would have paid for the policy and buy some gold every month.  Bury it under the basement floor and leave a note where to find it with you will.  If you're so far in debt you can't afford that then you've got nothing to give anyway.  At least they can't make next of kin assum their parent's debts (yet)!

fonzannoon's picture

Very true. Heads they win, tails you lose.

All Risk No Reward's picture

The criminal oligarchs win every time, yet soooo many people hang on to the psy-op false narrative that they are stupid.

People, if they were stupid, they'd be broke or in jail for a fraudulent monetary system, and all the millions of crimes that surround it, instead of citizens being broke and in jail for petty chit.

Debt Money Tyranny

Son of Loki's picture

solid posts Fonz and ND. Thanks.

Born-Again Bankster's picture

Insurance companies are the greatest ponzi scheme ever.  Buy a million dollar policy with premiums locked in for 20 years.  Pocket the premiums from all the sheeple, lever up that balance sheet 50x and when a million dollars loses 50% of its value in 20 years and you're still alive, we'll jack up the rates to adjust for inflation.  You're better off dead.  Gotta love capitalism.  Sigh. 

slightlyskeptical's picture

10% down. Verified income. Life insurance as collateral probably means a whole life policy which likely amounts to  another mortgage payment. You will be paying for this credit much more than even the average subprimer would pay if rates were just set fairly. It's like paying $175 to get a $200 credit limit CC. The lender assumes little risk and reams the borrower on the interest rate.

Bunga Bunga's picture

But, but, but you can take out a HELOC as soon as the house prices bounce up and that pays for the insurance premiums by itself. Live for free, here we are again.

NoDebt's picture

No, this is worse than that.  This is a version of Credit Life Insurance (decreasing benefit term life).  It's where YOU pay to insure SOMEBODY ELSE.  It's possibly the most mind-fuckingingly bad insurance product ever conceived.  Can you imagine paying for a life insurance policy to cover somebody else's risk (in this case the lender on your mortgage)?  That's credit life insurance.

It's often used to suck money out of stupid people who buy things on credit cards, or finance a car, etc.  Never seen it applied to a mortgage before now, though.

At least with whole life you can just pay the first payment and walk away from it (insurance policies are UNILATERAL contracts- only the insurance company must live up to their side of the contract- you can stop paying any time you like and the only thing that can happen to you is the policy is cancelled).  In this case I bet the insurance is "bundled" with the mortgage payment so you can NEVER cancel it.  You'll pay for it the ENTIRE TIME YOU HAVE THE MORTGAGE.  Considering it's likely a 30 year mortgage..... well, it would be the payment on a 30 year decreasing benfit term policy (face value based on the amount owed on the mortgage day 1) slapped right on top of the "normal" mortgage payent.

This is an insurance product that's so bad, they considered outlawing them.  It simply does not benefit the person paying for it, is the basic problem.  Now they took that productfrom 4-5 year car loans and put them on 30 year mortgages.  Un-fucking-believable.

Short version:  Not only is the mortgage on your house already secured by the physical asset itself (the house, as it has been forever), but they are going to make you PAY MORE for mandatory insurance on the mortgage on that house.  This is an incredible ass-ramming with no lube for anyone who signs up for one of these voluntary financial screw jobs. 

Oh, and just so you know, if you default on the mortgage payment the insurance is automatically cancelled (that's the nature of Credit Life Insurance).  Which is probably why they are doing this in the first place- they'll never pay off.  Miss a payment and the insurance company is off the hook.  You just payed the insurance premium all those months/years for nothing.  Just when you need it most, it evaporates like a fart in the wind.

Dealyer Turdin's picture

Your post is the vodka in this potato of a story by the way!

Demonoid's picture

Double Indemnity!

A new way for Bernankers to be evil, just when it looked like there were no more.

Plus, the mortgage includes a pre-paid funeral as a signing bonus.

eigenvalue's picture

We are in a bigger credit bubble. We all know what Bernanke will do if the bubble shows the slightest sign of deflating. BUT gold and silver are still in a coma and don't any sign of life. What a tragedy!

SAT 800's picture

It;s all a matter of time and the human perception of time. Silver sold for $4.35 an oz. in 2001, and then went back down and sold for $4.35oz. again; in 2002; what could possibly be a worse investment? When you're an electronic engineer you spend a lot a time looking at Oscilloscope traces; the machine has a knob on it for the time line of the horozontal axis; if turn it one way you see a rising curve; it's a rally!; if you turn it a bit more you see a falling curve; it's a bear market!; if you turn it again you see a wave going up and down. There are fundamentals they exist. they have not been eliminated. Reality has not been eliminated. The best feeling in the investment world is to know that the underlying reality is on your side; because reality is a bitch and it kicks everyones ass who drifts off into make-believe land. No tragedy; just human folly; standard operating procedure. Reality will arrive and sweep alll the make believers into the waste basket.

Dealyer Turdin's picture

That argument is perhaps better applied to gold, unless something like graphene pans out.  Silver is like rocket fuel on steroids if we ever come to understand its role in electrical energy extraction from our environment, because, rocket fuel expends itself delivering energy.  Silver will remain a simple-life tool, an artisan's medium, medicinal asset, and really, it's just better than green toilet paper.

Sure the value of silver goes back down, but then again, the value of the life of an American citizen has dropped to new lows it would appear as well.   Well, it's not the koolaid of choice in our current cult paradigm, but then again, it makes a damn fine mirror in the smoke, now, don't it?  By the way, the machine your Oscope is hooked up to is flatlining if you ever go back to the old gains.  You might get a better readout if you had silver probes.

chump666's picture

borrowers who may wish to bypass the traditional paperwork involved in the typical underwriting process but who would otherwise qualify.

And the life insurance policy isn't the underwrite?

Hell, when this thing blows up again, lawyers will have a field day. 


fonzannoon's picture

If you can fog a mirror a life insurer will take your premium today. Their actuaries have figured out that they won't be around when you submit your claim.

chump666's picture

So what happens if the buyer drops dead?  The lender gets the life insurance and writes the mortgage off?

That's an a-grade scam right there.


fonzannoon's picture

my point is the insurer is betting you stick around for a few more years....which will probably be a few more years then they will. Their bond portfolio's have been maturing and as they are forced to buy new bonds at these rates I would not be surprised if they end up in ponzi mode taking new premium in and immediately applying it to higher rates they guaranteed on old polocies and cannot find in the market today.

Insurers don't get that freshly printed QE money to roll around in. They are probably on life support right now (no pun intended).

If too many people start dropping dead today either they start denying claims and go the shenanigens route or they are toast.

Dr. Engali's picture

You are spot on Fonz. They know they won't be making good on these products. Hell they can't hedge what they have now. They are trying to do everything they can to either buy out policies or terminate more contributions.

fonzannoon's picture

It sounds like a Reggie Middleton special. I have been waiting for him to be all over this. Maybe he is?

TheAlchemist's picture

The mortgage is paid of and the best part?  They still own the property as they were the underwriter and the person who secured the property is now deceased.

You don't think they'd actually let the property pass to the next of kin, do you?

Not that it's not already important, but I'd love to read the fine print on one of these agreements.

bilejones's picture

Seems like a fair deal, Miss a payent you get whacked.

Auntie Lo's picture

By one of those mini-drones. If it was during black fly season, we would never know the difference up here in Maine!

khakuda's picture

Three cheers for Bernanke for proving that 2008 was the aberration and making everything normal again.

Fucking idiot.

Dr. Engali's picture

The sad thing is Wallstreet will find enough people who that are willing to be separated from their money who will buy this product.