No‑doc loans fuel housing instability

Loans that skip income verification (no‑doc) or accept minimal proof (low‑doc) concentrate in private and non‑conforming markets, charge high short‑term rates, and default far more often than standard mortgages. They were a large share of originations before 2008 and remain a regulatory blind spot because many are structured as business or investment loans to avoid consumer protections. — Policymakers and voters should track no‑doc lending because it raises systemic housing risk, creates predatory short‑term credit markets, and tests the limits of existing consumer‑protection law.