It must be tempting to pocket $5,000 to let someone use your name and credit rating to falsely acquire a mortgage.
It’s also illegal.
It’s fraud, and ‘straw buyers’ who lend their names for cash can end in jail, or worse, says Diane Scott, president of the Calgary Real Estate Board.
“As a straw buyer, you are participating in the crime and you can be arrested and charged,” says Scott. “You might get off with a fine, but for the $3,000 or $5,000 to let the fraudster use your name, you’re stuck with the mortgage and responsible for paying it off.” If you can’t pay it off, you could be facing bankruptcy, decimating your lifestyle.
Mortgage fraudsters can sound quite convincing, telling you your name will be on the mortgage for only a few months.
Many straw buyers are approached by people they don’t think would do them wrong.
Think again, says Scott.
“Mortgage scams are carried out in all different forms and involve a multitude of people; some who don’t even know they’re being taken advantage of,” she says. “There are two prominent mortgage fraud schemes: One involves scams that attempt to illegally acquire property — fraud for property — and one wherein schemes are designed to squeeze money out of transactions involved when a property is exchanged between buyers — fraud for profit.
“The number one rule to remember when it comes to real estate investments, or any investments is, if it sounds too good to be true, then it probably is.”
Another form of mortgage fraud using straw buyers is having someone sign documents that contain false information or information they cannot prove. For example, if you say in a document you intend to live in the house, but have no intention of doing so, that is fraud.
It’s also illegal.
It’s fraud, and ‘straw buyers’ who lend their names for cash can end in jail, or worse, says Diane Scott, president of the Calgary Real Estate Board.
“As a straw buyer, you are participating in the crime and you can be arrested and charged,” says Scott. “You might get off with a fine, but for the $3,000 or $5,000 to let the fraudster use your name, you’re stuck with the mortgage and responsible for paying it off.” If you can’t pay it off, you could be facing bankruptcy, decimating your lifestyle.
Mortgage fraudsters can sound quite convincing, telling you your name will be on the mortgage for only a few months.
Many straw buyers are approached by people they don’t think would do them wrong.
Think again, says Scott.
“Mortgage scams are carried out in all different forms and involve a multitude of people; some who don’t even know they’re being taken advantage of,” she says. “There are two prominent mortgage fraud schemes: One involves scams that attempt to illegally acquire property — fraud for property — and one wherein schemes are designed to squeeze money out of transactions involved when a property is exchanged between buyers — fraud for profit.
“The number one rule to remember when it comes to real estate investments, or any investments is, if it sounds too good to be true, then it probably is.”
Another form of mortgage fraud using straw buyers is having someone sign documents that contain false information or information they cannot prove. For example, if you say in a document you intend to live in the house, but have no intention of doing so, that is fraud.
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