Decoding Wire Fraud in Real Estate Transactions

Mortgage wire fraud is becoming more common. It can be a particularly damaging crime since real estate transactions often involve a lot of money. For a person buying a home, it could be most of their savings from several years. This post will look closer at wire fraud in real estate transactions.

Wire Fraud in Real Estate Transactions: What You Need to Know

Real estate wire fraud involves scammers tricking buyers into wiring money to the wrong bank account. Two common ways they do this is through phishing or spoofing. Essentially, they’ll take information and try to impersonate your real estate agent or closing company. Under this guise, they’ll give you their bank details to divert your closing funds.

Let’s look at ways to prevent wire fraud in real estate transactions.

Understand your Closing Process

Your real estate agent or closing attorney is there to guide you through the closing process. However, having a comprehensive understanding of each step can empower you to identify potential scams. This knowledge puts you in control of the transaction.

You can ask your lender about payment options and what to look for to ensure you are making a valid payment. However, you should avoid adding sensitive details in emails to prevent phishing. If a scammer can compromise the accounts of people in the transaction, they can use the information to facilitate the fraud.

Beware of Last Minute Changes

Claiming sudden changes to the closing process is a common trick of scammers. They usually send an email asking you to wire your money immediately to ensure the transaction. The email subject line might look like one of the following:

• URGENT: Changes in payment methods for the closing process
• ASAP: Read and confirm payment changes

The idea is to create urgency so the buyer doesn’t take the time to think about their actions. These emails may even look nearly identical to official messages from your agent or lender. A simple way to guard against this is to call your real estate agent or lender before making a transaction.

Be Careful With Information in Emails

Buyers must be careful about the information they include in emails. Information like bank accounts and financial statements can be subject to phishing if you send them. Instead of emailing this information, you should request an in-person meeting with lenders and other parties.

Write Down Contact Information

Write down the contact information of your closing agent and lender. That can help you confirm that you’re making a valid payment to the correct account. You can use this list from the Consumer Financial Protection Bureau to ensure your closing process goes smoothly.

These are just some tips to identify and prevent wire fraud in real estate transactions. The best defense against scams is to stay informed. If something doesn’t feel right, trust your instincts. Don’t hesitate to ask or call your agent if you’re unsure about something.

Do you need help closing on a home? Click here to contact First National Title & Escrow. We can help you ensure a secure transaction. Reach out now to learn more about our services.

Thanks for visiting!