What is a Straw Buyer?

What is a Straw Buyer?

In a straw buyer scheme, one person (the straw buyer) purchases a house or other property on behalf of another person who cannot complete the transaction on their own, for example they may not qualify for a loan. The straw buyer either has good credit or falsified credit information to qualify for the loan. Often the straw buyer gets a percentage of the proceeds of the loan. The straw buyers has no intention of ever living in the house or making mortgage payments.

A straw buyer scheme is one of the most common forms of mortgage fraud.

Who is Involved in a Straw Buyer Scheme

Straw buyers schemes may involve several difference parties to the real estate transaction. The most common people involved are: a real estate agent or broker, a home seller, a home buyer, a straw buyer, and a mortgage broker. Though, potential parties involved in a straw buyer scheme are not limited to these individuals.

How a Straw Buyer Scheme Works

There are a number of different ways in which a straw buyer scheme can work.

Here is one common way a straw buyer scheme operates:  A real estate agent or broker sells a home to the straw buyers at an inflated price. The inflated price increases the commission on the sale the agent or broker will make. The agent may entice the straw buyer by telling the straw buyer that the agent is helping the buyer purchase the house for a great deal, which will allow the straw buyers to split the profit with the real estate agent. A mortgage broker may also be involved in the straw buyer scheme. A mortgage broker may process false documents that allow the straw buyer to purchase the property.

A straw buyer who is part of the scheme may get a cut of the commission of the sale and/or a percentage of the proceeds of the loan. An unsuspecting straw buyer who is not involved in the scheme may unknowingly assume the mortgage, and when he or she fails to pay on the mortgage, the bank will foreclose on the property and the straw buyer  will lose their good credit and may face criminal charges.

Criminal Charges for Mortgage Fraud

If you are under investigation or have been accused of being a straw buyer in a mortgage fraud case, you may face serious consequences if convicted. It is essential that you seek the advice of a seasoned criminal defense attorney.

At Ashley D. Adams, PLC, our Arizona White Collar Criminal Defense Attorneys have extensive experience representing alleged straw buyers. We provide aggressive, strategic representation to our clients in order to limit exposure to harsh criminal penalties.

Contact us or call now (480) 219-1366 for a case evaluation. Have your questions answered and obtain the peace of mind that comes from having a former Assistant U.S. Attorney on your side.


The attorneys at Ashley D. Adams, PLC handle state criminal cases throughout Arizona including the cities of Phoenix, Scottsdale, Glendale, Mesa, Tempe, Ahwatukee, Maricopa, Gilbert, Peoria, Surprise, Goodyear, Litchfield Park, Avondale, Chandler, Casa Grande, Florence, Queen Creek, Deer Valley, North Pinal and Sun City as well as those living in and around Maricopa County, Pinal County, Pima County, Yuma County and Yavapai County.

The attorneys at Ashley D. Adams, PLC handle federal criminal cases throughout the United States, including Arizona, Oklahoma, Utah, and California.