Real Estate And Straw Buyer
A straw buyer is a person who lends his profile to a buyer who wants to purchase a house. For this the straw buyer could get a commission or a cut from the profits made out of this misrepresentation. People use straw buyers because their own financial profile is not good and also they manage to get good deals and secure financing options. |
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Straw buyers can be the victims of identity theft or out of their own choice. However, in either case, it is an illegal thing and a financial mistake.
People should never agree to make any kind of investment on someone else’s name, no matter how lucrative the offer might seem. It takes a lifetime for anyone to build a good financial standing and credit report. By agreeing to be a straw buyer, a person is risking everything that they have worked for.
A straw buyer can also be a victim of identity theft. An impostor could be using the buyer's profile for the mortgage. In this case, the straw buyer does not know of the purchase, and will come to know only if they bother to check their credit report.
The lender on the other hand does not care if the buyer is genuine or just a straw buyer. The lender has no way of finding it out either. As long as the profile looks good, which has become extremely difficult given the current economy, the lender will simply give out the loan. However, it is a very risky affair to be a straw buyer and you will be exposed to legal prosecution.
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