What is a straw buyer in real estate fraud?

A straw buyer in real estate fraud is someone who purchases property on behalf of another individual or group, often to conceal the true identity of the actual buyer. This deceptive practice typically involves a buyer with questionable credit that cannot secure a mortgage on their own. By using another person's identity—often with or without that person's knowledge—straw buyers can bypass financial barriers and influence the real estate market to their advantage. This can involve submitting fraudulent documentation and misleading lenders about the true intent and financial standing of the buyer.

Understanding the role of a straw buyer is critical in recognizing and combating fraudulent activities in the real estate industry. The fraudulent nature of this practice stems from the manipulation of financial assessments, which can lead to significant legal implications for all parties involved.