A straw buyer is a middle man that acts as a legitimate buyer but who is other than they appear to be to the seller or lender. It used to be a straw buyer was someone who would shield the final buyer from the seller to just keep the price down. Such as Wal-Mart hiring me to be a straw buyer for 100 acres of ground they want me to buy for them. They pay me to legitimately buy the land but to keep their intentions to build a Wal-Mart store secret. I get paid $100,000 to buy the ground and then to immediately sell it to their corporate real estate department. That’s completely legitimate and smart business because if the seller knew the ground was to be used to build a store for Wal-Mart the price would increase by more than tenfold. So what is wrong with a straw buyer?

Well in some instances straw men are used to get around regulatory requirements that would otherwise preclude a person or company from buying a piece of property. Such as with repossessed homes; with repossessed homes, HUD Homes, for a set period of time (I believe it’s the first 120 days) only people who intend to live in the homes can bid on them. Investors are precluded from buying these homes when their intention is not to live in them, but to resell. Where straw buyers get in trouble is attempting to gain an advantage to do an end-run on the laws of the land. That is my friend, what they call the last straw.

Investopedia has a good definition of the straw buyer as well as it sometimes being a legitimate business transaction.

Now let’s not forget our friends at the Mortgage Fraud Blog, she has another ten articles that included a few about straw buyers being criminally prosecuted.

Mortgage Fraud Blog - Perp Walk - 10 new articles

In This Issue...

Developer Admits Scam that Contributed to Bank Failure
Real Estate Investor Indicted for Stealing from Clients
Mother Sentenced for Forgery and Straw Buyer Conspiracy
Real Estate Investor Admits Foreclosure Bid Rigging
Lawyer, Loan Office and Loan Processor Admit $9M Fraud
Alleged Loan Modification Scammer Arrested
Orchestrator of Straw Buyer Scam Sentenced
Investor Sentenced for Cash Back Mortgage Scam
Foreclosure Rescuer Sued for Failing to Deliver
Real Estate Investor Convicted of Running Ponzi Scheme
Search Mortgage Fraud Blog - Perp Walk
Steve Lombardi
Iowa personal injury, workers' compensation, motorcycle, quadriplegic, paraplegic, brain injury, death
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