The Tampa Bay area is now experiencing situations that may involve mortgage scams. This was recently brought to my attention when I had a buyer who wanted to make an offer on a home that involved flipping a property two times in the same transaction. Basically, the owner of the home made a deal with a 3rd party buyer to purchase the property outright using cash. This was done using an option contract. The 3rd party then tried to obtain another buyer (which was my buyer) to sell the home at a higher price to make a quick profit. Only after digging through the public records and speaking with a title company, did we find out that the property had an option contract, which made it impossible for my buyer to obtain financing. My advice is to do your research before making an offer on a property.
Here’s the definition of a Straw Buyer:
Straw buyers are people who consent that their names and personal details are used by certain people with the purpose of obtaining mortgage loans with no purpose of ever inhabiting these homes. Sometimes a straw buyer will be offered several thousands for the favor, or they may never know that their name and information will be used on the loan application. Straw buyers are also asked to sign forged documents.
Straw buyers are usually involved in the so-called mortgage fraud rings. The initiator of the scheme usually leaves the country after successfully obtaining large loan amounts for overvalued properties, and the straw buyers may end up being sued by the lenders who extended the loan money.
Even if straw buyers claim to have participated in the mortgage fraud uninformed of the fraudulent activities of the perpetrator, they are responsible for participating in criminal offence.
Having a buyer’s agent is more important than ever in our housing market. If you need help purchasing a home you can reach me at 813 784 7744 or email