Have you ever heard of the “Straw buyer” scheme?

And it has nothing to do with farming..

It’s another term for mortgage fraud.

The “straw” or “dummy” home buyer scheme.

For example, a renter does not have good credit or maybe he/she doesn’t not have the income needed to get a mortgage, or sufficient down payment, either way they can’t purchase a home.

He/she or an associate approaches someone else with solid credit.

This person is offered a sum of money (a benefit, can be as much as $10,000) to go through the motions of buying a property on the other person’s behalf – acting as a straw buyer.

The person with good credit lends their name and credit rating to the person who cannot be approved for a mortgage for his or her purchase of a home.

You can usually count on other types of criminal activity dovetailing with mortgage fraud or title fraud.

For example, people who run “grow-ops” or meth labs often use these forms of fraud to “purchase” their properties.

Following are some red flags for mortgage fraud:

  • Someone offers you money to use your name and credit information to obtain a mortgage
  • You are encouraged to include false information on a mortgage application
  • You are asked to leave signature lines or other important areas of your mortgage application blank
  • The seller or investment advisor discourages you from seeing or inspecting the property you will be purchasing
  • The seller or developer rebates you money on closing, and you don’t disclose this to your lending institution

Call me if you have any questions,

Mark Fidgett
Your Vancouver Mortgage broker