I believe "straw buyer" is a term used to indicate a person who is signing contracts for purchase (etc.), but who is not the intended final owner of the property. That person then assigns the contract (if permitted) or resells the property shortly after closing to the actual intended buyer. I know Walt Disney used many different "straw buyers"--if that is the correct usage--to purchase the huge amount of acreage in Florida required to build Walt Disney World. He did this so no one would hold out for higher prices and no one would get wind of his plan. Illegal? No. Unethical? Possibly, dependent upon the principals and the intent... Increasing a FICO score by obtaining authorized user status on some one's account that has good credit is called "piggybacking". This is done with the good credit score holder's consent; and they are sometimes financially compensated. For now, this is not illegal; but that may change very soon. To my knowledge, the two are unrelated, but I'm sure a person looking for loopholes could find a way to use both as an unfair advantage. Boy, that was a mouthful--I hope it made sense!
My first borrower mentioned above was helping a friend and his family buy a home. The friend essentially did not have the greatest of credit but they couldn't afford the interest rates that they were being offered due to their credit scores, which was 2-3% higher than the interest rate I found by using my borrower's score. Essentially the friend paid the mortgage every month. My borrower put his friend on title after a year and a year thereafter, signed a quitclaim while refinancing to hand over the property to his friend completely. No added costs, no twists or turns, just generally wanting to help out a friend.
The other situation was just mere ignorance--it is basically impossible to hide financial and intent information from a mortgage standpoint for the exact reason that the lender and loan officers need to know basically everything about the borrower. Sooner or later, details that were meant to be kept secret will come out and that's what happened with this scenario. To say the least, when everything came loose and we had discussed the situation, the borrowers backed out of the deal.
For real estate it usually means a qualified buyer using their information to help someone else buy a home. Typically I will guess this is illegal if there is a loan involved as the big mortgage companies always ask if the home will be owner occupied. Lots of people think they can get around this, but the mortgage companies have a way of finding out. They can ask neighbors, see who has insurance on the house, see where the tax statements are mailed, and plenty of other ways. There are people going to jail for mortgage fraud these days. These cases are often investigated by the FBI, so if you don't want them knocking on your door, stay away from straw buyers or anyone you think is committing mortgage fraud.