Wire Fraud Warning On Real Estate Deals

7 Replies

I know its posted as a sticky on this forum but just got hit with this one today!  Not on a mobile home park but a residential property we just opened escrow on.  

Its unreal how legitimate it all looks so verify wire instructions with your title company via phone (and make sure its the title company on the phone !) 

Though we don't have a closing for a couple weeks, i got instructions today that said send XXXXXX  .  My first thought was weird.... someone dropped the ball and wants the wire real early but it was all like a normal email ....    

Then i saw the amount.  It was sale price minus EM .  Then it clicked since there were no prorations factored in or settlement statement.    The domain email was from the title company, all the info as if it were from the title company, wire sheet doctored up that way.  

Even later in the day another one following up.... 

I talked with the title Co and they have even had it where the people start with the calls trying to build up the story. 

Be careful out there guys.  I know I had seen this warning on BP but just a reminder here to make sure you verify verify verify!

Same thing with me about 30 days ago. The weird thing was the fraudulent emails had my closing $ amount exactly correct. Down to the cent.

What flagged me was the email didn’t quite seem like the ‘writing style’ of my closing lady. Lucky I called to verify. ALWAYS call to verify.

Just curious, has anyone actually wired money somewhere it shouldn’t have gone? What’s the process to recover it?

@Joel O'Leary  I have seen a post on BP where someone had done it. My fear is that its not recoverable.... 

Unreal... its so advanced compared to the send 50$ to claim your $5000000000 from Nigeria....

@Joel O'Leary   unless they catch it very early on like within in an hour or so.. I am thinking once it hits the bad guys account they have within 30 seconds moved it off shore.

this all started when title companies would not take personal checks.. because lenders and such could not get there docs there until last second.. so no time to clear a check.

So then the title co  required cashiers checks.. well that went along for a while until the bad guys figured out how to forge cashiers checks.. it was really bad in Florida for instance.

So then it went to wires were we are today.. and now with everyone relying on E mail. and the ability of hackers.. once the bad guys realized how much money flowed and how many to most of the folks doing this were newer it was like katy bar the door.

our process since we wire every day.. is two fold request from closer and at this point we might be on deal 30 with the closer and have their coordinates.. any e mail that changes their wire.. the big one is Hey we just moved banks here is our new wire info.. that is HUGE red flag and we go into telephonic mode.. most of the closers I use I have used for many years so I know there voices..  but if its new..

I call or my office calls and here is a little.. trick I use..

I google their office to make sure its there.. then I look at street view.. and I can usually see something of note..   so lets say there is a Taco Bell across the street.. I will say on the phone ( and I know this is corny )  Hey is that an in and out burger across the street from you..  they should respond with no its a taco bell..  now so far I have not run into a fraud..

We did have one of our vendors get hacked and got a fake e mail.. but it was not from a title company it was from our vendor saying she had changed accounts and please send the proceeds of sale of XXX st to this new account..  we happened to be on the phone with her.. and said hey did you just send me an email changing your bank.. NOPE.. turns out she had been hacked.. her e mails between me her and our closing attorney were being routed to some other IP.. they just watch and wait then pounce.

this is all very real.. and there are millions upon millions lost very month..

We also do our wires in person at the bank.. so we check them then have the bank double check.. that gives us some security.

Whenever I issue a payoff, I encrypt and password protect the payoff and wiring instructions document, then call the attorney with the password.  We also put in the payoff instructions to call us before wiring to verify the routing and account numbers, but it's amazing how many title companies and closing attorneys DON'T DO THIS!

If someone gets scammed, and it is the other person's fault, then you are still in trouble, because either

1.  The other person doesn't have an extra 200K lying around to make good, or

2.  If they do, you are in litigation to get paid

So everyone loses in wire fraud.  

@Ann Bellamy   maybe there is going to be something to this bitcoin stuff and blockchain.. although I read about scammers in that stuff too.

The emails look real because in some cases they are. The criminals get inside computer systems and send real emails with real info but wrong instructions. Block chain is the new hope but nothing is solid yet. People should physically go to their title company if they are able. 

@Jimmy Dudley   its sort of depends on where you live and closing customs.

for instance on the west coast there is no such thing as a wet closing.. or having all parties come to the closing table.. simply never happens.

so when we sell something here I usually go in and sign ( if I want to I can also just have them e mail docs and I sign and they send a courier to my office.. )

this is done 2 to 10 days before closing.. then the buyers come in the 3 days before usually because they have their 3 day right of recession ( owner occ mortgages)  then the loan package goes back to the lender.. then the title company has to record in the morning.. and has to send recording numbers to the lender then the lender funds.. then the next day once this is done title company will cut checks or wire proceeds.. for us 100% wires we never get checks..

its always kind of comical when I am sitting in my office in Oregon closing a deal in some east coast state and the closing attorney sends me an email with the time of the closing and wants to know if that time is good for me like I am really going to be there.. I never ever go to closing.

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