Moving right along, lets discuss for a moment the term "Straw Buyer", what exactly does that mean? Here's the definition of a "Straw Buyer" according to this guy:
A straw buyer is a person who uses or allows their credit to be used for the purchase of a property they never intend to use or control. Straw buyers can also be used to purchase non-owner occupied properties by being paid simply for the use of their credit.He then goes on to suggest the following recruitment ad for said "Straw Buyer"
CREDIT PARTNER - GET PAID FOR DOING NOTHING!I take issue with the guy calling the Straw Buyer recruiter "Leroy", considering today's geopolitical atmosphere I find that to be very racially insensitive!
All you need to do is let us use your credit score to purchase properties and we will handle everything else. We will make the down payment and pay the monthly mortgage note and give you $10,000 for each purchase you make. You don't even need to come to the closing! Call Leroy at 404-555-1212 and I will give you $10,000 cash on your first deal by the end of this month!
"Get paid for doing nothing!"
I've been doing nothing for 40 years and haven't gotten paid a cent! DAMN, where was I when this ad was published! Regardless though, we all know the scam, at the height of the mortgage and housing bubble banks were literally lending money to anyone with a pulse, whether the loan was for a home, car or anything for that matter. Pay off the "Straw Buyer" for the use of his credit, bust him out and move on. In these instances the guy who sold his credit wasn't a pillar of society anyway and more than likely didn't give a rats ass about his credit going down the drain, the lure of cash in hand was far more attractive than a credit score! For the sake of our discussion lets call this guy "Straw Buyer V. 1.0."
Lets now move into the twilight of the easy credit era, a time where banks were tightening up their lending standards, lets say for the sake of argument that this period was the end of 2007 through 2008. With credit getting harder to come by, what was the scamster to do? By now the mortgage fraudster knows that his stable of "Straw Buyer V 1.0's" is nearly useless, now you need real people with real credit histories! People who fit this description aren't going to give up a sterling credit history that they've worked so hard to achieve! What to do?! Never underestimate the criminal mind, where there's a will there's a way, when there is money to be made, the scammer will figure out a way to get it.
I'm going to propose the perfect scam, please keep in mind that I'm not accusing anyone of doing anything illegal, this is a purely hypothetical situation. We've established that the "Straw Buyer V. 1.0" has outlived his usefulness, now lets figure out how to lure the "Straw Buyer V. 2.0". What if I came up with a way to use someones credit to pull off a six figure scam and at the end of the day had the person who sold me their credit off the hook for the loan I obtained with their credit? Check it:
- Recruit a "Straw Buyer" to sell their identity.
- Find a home that will allow a fraudulent transaction with a LARGE PROFIT.
- Use the "Straw Buyer's" identity to obtain a mortgage for the transaction.
- Create false identification using the "Straw Buyer's" identity but with someone else posing as them.
- Close the transaction with impostor, pay off the "Straw Buyer" and pocket a nice chunk of money.
- Make the payments on the fraudulent transaction for slightly more than one year.
- Once at least one year has passed, have the person whose identity you used in the transaction scream identity theft.
Perfect isn't it?