When the US real estate bubble burst it uncovered a problem:
It turns out that some realtors, mortgage brokers and lawyers were pushing through real estate deals that weren’t entirely ethical. Some groups would use straw buyers purchase property at a price far above what it was worth and then take out a loan for the excessive amount.
Some of that is still being uncovered, here’s a recent instance:
Yeboah admitted participating in the scheme by creating fake W-2 forms, pay stubs, and other records for straw buyers so that her fellow conspirators could collect millions of dollars in kickbacks from fraudulently-obtained mortgage loans. In entering her guilty plea, Yeboah admitted reviewing payment records that showed over $14.5 million in kickbacks were collected from the fraudulent purchase of $100 million in properties.
Now it looks like the problem has spread to Toronto:
Earlier this year, the Star reported a pattern of house flips and price jumps as much as 60 per cent in less than a day involving Hatcher. Most of the deals didn’t include deposits. Purchasers got money back. Mortgages exceeded the value of homes. The same buyers and private lenders popped up in many sales.