Protect Your Money from Wire Fraud Schemes When Buying a Home
Buying a home is a life-changing and exciting experience. But it’s important not to get caught off guard amidst the excitement and be aware of wire fraud when purchasing real estate. Criminals are using wire fraud real estate schemes to steal money that is intended to be used for home purchases or the proceeds from the sale of the property.
What is Wire Fraud?
Wire fraud in real estate is a crime when a person(s) creates a scheme to obtain or defraud another person(s) based on false promises or representation. The criminal may use email, phone calls, or website forms to steal logins and passwords to get access to email accounts related to the purchase.
Once they discover that you are in the home buying process, they will attempt to represent themselves as your escrow officer or even a mortgage broker. In emails, they may even look like they are CC’ing other relevant parties such as your real estate agent, but the email addresses could be just one or two letters off. Just enough to make them appear real, but they’re not.
The emails will often include fraudulent mortgage wire transfer instructions. If you do receive one of these wire fraud real estate emails — don’t answer it. It may only take a few minutes from the time you answer the email for your money to be gone.
The Cost of Wire Fraud in Real Estate
Wire fraud in real estate, according to the FBI, cost Americans more than 150 million dollars in 2018 — and the problem is escalating rapidly. The FBI also reports that since 2015, the incidence of real estate fraud has catapulted 1,000%. That is outrageous. All potential homeowners should use caution and diligence when it comes to sharing any of their personal data or information..
How it Happens
It usually starts on Multiple Listing Service (MLS) sites such as Trulia and Zillow. The criminals will comb through the site looking for pending home sales. When they identify them, they will then make a profile of all the parties in the transaction and attempt to discover their contact information. Doing so is generally not very hard using public websites and online search engines.
If they can hack into one of the party’s emails, they can monitor the communications and then swoop in and send their own “spoofed” email (1 or 2 characters off a real one) that includes:
- fraudulent mortgage wire transfer instructions to snag closing costs
- a down payment, or
- mortgage payoff funds
They do it over and over again just like this — and unfortunately, make a lot of money doing it.
How You Can Protect Yourself from Real Estate Fraud
You can have a convenient, streamlined, safe real estate transaction and closing with a reputable, experienced title company. A good title company will have your security in mind every step of the way until the key to the front door is in your happy hands. The title company will do their job to maintain data security and privacy, but you can also protect yourself from wire fraud in real estate transactions with these four tips:
1. Call, Don’t Email
Make sure to confirm all wire transfer instructions are delivered via phone with the number listed on the title company’s website. If you do receive an email that details changes in the wire transfer instructions and that email contains a phone number — don’t call it.
2. Be Suspicious
Title companies typically do not change the instructions for a wire transfer after it has been communicated to you already. Wire fraud in real estate is so popular because the criminals are very good at matching logos and making their emails look legitimate. Always be suspicious when it comes to any changes in processes, particularly when it has anything to do with money.
3. Confirm Everything
Always ask your bank to confirm the account number, as well as the name listed on the account before sending a wire transfer. Your due diligence can determine whether you end up being a victim of wire fraud in real estate or not.
4. Verify Immediately
Call the title company immediately after you send any funds via wire transfer to verify it right away. This check-in will give you the confirmation that you sent the funds to the appropriate account and the confidence and peace of mind that the transaction wasn’t real estate fraud.
If You Have Been Targeted for Real Estate Wire Fraud
If you cannot confirm the wire transfer, then call your bank immediately and ask them to issue a recall notice for the wire transfer to start the process of wire transfer fraud recovery. Then, go online to ic3.gov and report the crime. After that, call your regional FBI office and local police. Nearly all wire transfers involved in a home purchase fall under the legal statute of frauds in real estate — a law that is in each state in the country that says that for certain contracts to be enforceable, they must be in writing and be signed by the person against whom enforcement of the contract will be sought.
Contact Bay National Title Company
Bay National Title Company works with potential homeowners every day, delivering excellent customer service and secure, streamlined closings for real estate in Florida and across the country. From what you need to know about the dangers of real estate wire fraud to title insurance, we are here for you as industry professionals to make sure the home buying experience is a positive one.
You can count on our meticulous team for unsurpassed customer care, our renowned blend of exceptional service, and dedication to each client as well as unmatched accuracy and security.
Contact us today for a better closing experience.