What are Alt-A loans?

"Alt-A loans," also known as 'alternative documentation loans', are loans in the US, usually mortgages, which require less stringent requirements for collateral and documentation than traditional loans. These loans are often provided to people with a credit rating just below the 'A' level, such as start-up entrepreneurs, people who are divorced, or employees with variable incomes. Due to the limited control over income, they are sometimes mockingly called 'liar loans'. Despite their increased risk, they are considered less risky than subprime loans. At the end of 2008, approximately $700 billion of Alt-A loans were outstanding in the US.