I can't understand how the straw buyer isn't completely in on the scam. I mean, their income levels and assets are completely fake and they are getting a house they know they can't afford. Does the buyer just forfeit the loan and go bankrupt?
And if this happened a bunch of times, how did BMO not notice this earlier? Wouldn't someone say "well that's weird, we had 25 people walk away from a mortgage that was $50k more than the house was worth in the last 3 months"?
Maybe I just don't understand, but the buyer, real estate agent(s), mortgage broker, and lawyer would all have to be in on it...but everything gets blamed on a piece of software? Sounds like a few people at BMO were turning a blind eye in exchange for a few more commissions to me.
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