Straw Buyer Scam Alert
Sellers and buyers beware. There are professional scammers looking to take money out of your pocket and into their own. Scammers are taking advantage of the mortgage crisis in new a creative ways. Unscrupulous mortgage brokers and realtors are teaming up to defraud banks and sellers with Straw Buyers.
Here is how it works. Crooked brokers find people they solicited to act as straw purchasers of single family homes on behalf of others with bad credit who wished to purchase homes. Those solicited were told they would benefit financially from the transactions. The brokers then defraud lenders by submitting fraudulent loan applications, representing straw purchasers of homes as actual purchasers of homes.
They also submit fraudulent loan applications on behalf of these straw purchasers, which falsely inflate the buyers’ income, falsely state that a buyer was employed at a specific job, and falsely state that the properties would be owner-occupied. The purpose of the scheme is to ensure that the home purchase transaction closes, so that the broker will receive substantial loan broker commissions and illegal kickbacks from real estate sales commissions.
Don’t be a victim. If you are a seller, make your attorney verifies of your buyers identity. If you are a buyer, don’t get involved in these schemes. If convicted, the maximum penalty for bank fraud is 30 years in prison and a fine of up to $1 million, for mail fraud is 20 years in prison and a fine of up to $250,000, and for money laundering is ten years in prison and a fine of up to $250,000 or twice the value of the money laundered, which ever is greater.
Check out your realtor and mortgage broker and make sure that they work for reputable companies. If you need referrals for reputable professionals…Ask Rey.