What is a mortgage fraud straw buyer?Answer:
A mortgage fraud straw buyer is a not so innocent person who agreed to provide their name to help someone obtain a mortgage. While there can be a whole criminal ring of straw buyers who accepted money for participating in a huge mortgage fraud, often there is simply a good credit friend trying to help their bad credit friend get a mortgage.
A straw buyer would take a mortgage and later quit-claim the deed to their friend with bad credit. However, their name stays on the mortgage book and should the bad credit friend default, the straw buyer is the one who is responsible.
There is a simple way to avoid becoming a straw buyer. Do not provide your personal information to other people. Do not try to trick the loan officer when submitting a loan application. If you want to help someone get a mortgage, make sure this is a person you can really trust.
If you are offered money in exchange for your personal data, report them to mortgage fraud investigators, or the FBI.
While it is possible that you didn't suspect you became participant of a mortgage fraud, the judge may be difficult to convince.
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