How to Avoid Big Mistakes in the Real Estate Closing Process
There has been a recent increase of real estate wire fraud, but you have the power to spot the warning signs before it happens to you. According to data provided by the FBI, in 2017, close to $1 billion was “diverted or attempted to be diverted” from real estate purchase transactions, and wired to “criminally controlled” accounts. That figure is up explosively from 2016, when the FBI counted $19 million in stolen funds.
The scam generally works like this: Hackers find an opening into a title company’s, realty agent’s, or mortgage banker’s email account. They track upcoming home purchases scheduled for closing, then assume the identity of the title or escrow agent handling the transaction. You can spot wire fraud with a few key hints:
Ways to spot wire fraud:
- Scammers will use a loan officer, real estate agent, or title company email and letterhead.
- They’ll state that there has been a last minute change to where the money is transferred.
- Email will say checks are no longer accepted/money wiring instructions have changed.
- They’ll supply new account information for the transfer.
Of course, none of that is true, but if the scammer is successful, their victim will send the money to the scammers account unknowingly, and the money is gone!
Protect yourself & others:
- Always be on the lookout for suspicious emails.
- Always call the closing company directly to verify wiring instructions before proceeding.
- If you are affected by wire fraud or suspect suspicious activity, call your local field office of the FBI immediately and visit www.ic3.gov, the bureau’s internet complaint center.
Have questions or concerns about wire fraud? Please feel free to contact us or your escrow officer.