A situation in which asset prices are seriously inflated can lead to a market crash. Notable examples are the South Sea Bubble, the dot-com bubble, and the mid-2000s housing bubble.
A Liar Loan is a type of mortgage loan in which the borrower is allowed to take out the loan without providing standard documentation to prove income, employment, or assets. These loans were quite prevalent during the housing bubble of the mid-2000s and significantly contributed to the subsequent financial crisis due to their risky nature.
