Velocity Commercial Capital took steps to verify the so-called “liar loan” included in VCC 2015-1, a small balance commercial mortgage securitization, according to Kroll Bond Rating Agency, which rated the deal.

A report published by Bloomberg this month alleges that proceeds from one of the loans used as collateral was used to purchase a home for use as a primary residence, and not an investment property. The article alleges that the loan used to purchase a $2.95 million home in Manhattan Beach, Calif., was underwritten to low documentation (or no documentation) standard; such loans are commonly referred to as "liar loans."

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