Wire Fraud is Real
You found a home, negotiated an offer, got thru inspections, appraisal and financing. It’s the day before closing and you get an email from your Realtor® asking you to wire your down payment and closing costs to the title company at XXXXX. You wire the money, meet the movers and head to bed excited to close on your new home in the morning. The next morning you’re sitting at the closing table and your closing company rep walks in and asks if you remembered to wire the money?
After several conversations and frantic searches for emails…you learn that your money was wired to a fraudulent offshore account and is gone. As in…forever. There is no one to sue. No one to prosecute. No one to tag in Twitter. Because, in this digital age…you can be robbed countries away without a trace.
So…how does this nightmare happen? Most likely, the email of either the Realtor® or the Title/Closing Company was compromised at some point by malware. The fraudster then monitor the emails looking for upcoming closings. They then send an email that mimics your Realtor's email and tone and state that there was an error in the original wiring information and that they will need to send it to XXXX. Some have been so bold as to call the client as agents of the title/closing company to verify the information.
When this first type of fraud came out years ago, the local real estate community was appalled but not overly alarmed as no one knew any agent personally who had experienced this horror. Fast forward to today: we may not know of anyone firsthand, but we certainly know agencies who have had it happened locally. As in Brentwood, Nashville, Mt. Juliet…local.
S0 how do you avoid this as a homebuyer?
It’s a simple piece of advice: DO NOT WIRE FUNDS until you call the title company personally and ask them to reiterate the account number to you OVER THE PHONE. Your title/closing company will be local. Use their local number to call. Have your bank re-verify the account’s owner prior to the wire. Be just as invested to confirm where you’re sending your money as you are in selecting a mover or internet company.
In the event it does happen, what should you do? Contact your bank. Change your passwords. Talk to your attorney. Contact the police. Contact the FBI. Report it to your local Realtor association.
Don't let this diminish the joy of homebuying. Pack your boxes. Buy your home. Be excited! Just be smart.