Straw buyers for short sales - Lender Fraud
Recently, a business
model surfaced that purported to help homeowners stay in their homes by
allowing straw buyers to purchase the homes via short sale, with the
understanding that the buyers would allow the former owners to live in the
property as renters after the sale closed. Some even included a promise to sell
or deed the property back to the former owner. After investigating these
transactions, DRE found that the lenders would never have agreed to the short
sales had they known the former owners were going to be living in the home and
paying rent to the new buyers. This led to disciplinary action against the
agents involved for misrepresentation to a lender and/or fraud.
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