Money & Banking
Mortgage & Real Estate Fraud
Falsifying loan applications, using 'straw buyers' with clean credit to purchase property for someone else, occupancy fraud, and equity skimming that harms lenders and sometimes the recruited buyers themselves.
01 — How it works
- 01
Recruit
Find a straw buyer with clean credit for a fee.
- 02
Apply
Falsify income, assets, and occupancy on the loan.
- 03
Collect
Take fees and control the property or proceeds.
- 04
Default
Stop payments, leaving the straw buyer liable.
02 — Lifecycle
From first contact to detection.
Recruited
A straw buyer lends their name and credit.
Funded
The lender issues the mortgage.
Drained
Organizers collect fees and equity.
Defaulted
Payments stop; the straw buyer is exposed.
03 — Common variants
- Straw buyers
- Occupancy fraud
- Foreclosure rescue
- Equity skimming
04 — Statutes & penalties
18 U.S.C. § 1344 (Bank Fraud), § 1343 (Wire Fraud)
Typically 10–25 years. Large operations have produced sentences over 20 years plus massive restitution orders.
05 — How people are drawn in
Pitched as a 'no-risk investment,' 'helping a friend into real estate,' or 'credit repair' with promises of quick cash.
06 — Examples
- Straw-buyer operations that pay people with good credit to buy multiple homes in their name until payments stop.
- Falsified income, asset, and occupancy statements on mortgage applications.
- Foreclosure-rescue scams that target homeowners in distress and strip remaining equity.