Expert: Marina Lando - 3/9/2004

Question
In reading the evening paper a news item said a
bank employee was in trouble with the state
for making a loan to a straw borrower and using
the proceeds for personal use. what is a straw
borrower? thank you  

Answer
Dear Marty:

Straw borrower – is the person who was used as a cover to obtain a loan for another person. It is not legal.
For example: A has bad credit. He asked B with the perfect credit to obtain loan for him.

B goes to the bank and completes the loan application. Bank does due diligence, checks his credit score, checks his business plan, etc. and as a result B receives loan. He immediately gives the money to the A. It is a fraude. B is a straw borrower.

Hope this will help.

Sincerely,
Marina Lando
Business Loan Quest,LLC
www.blquest.biz