The financial markets rarely run out of obscure names to help describe their ever more complex contracts and transactions, but the recent anxieties in the subprime mortgage market have inspired a chilling neologism: "liars' loans".

These are the mortgages granted on the basis of the "stated income" and "stated assets" - that is, self-certified wealth - of the applicants. Just how wildly some of these incomes and assets have been overstated is only now becoming clear.