As technology advances, it’s become more and more integrated in the mortgage process. At this point you can obtain financing entirely online and via email communication – which is great for convenience, but unfortunately it’s opened the door for wire fraud in a very scary way.
In the real estate industry, wire fraud has jumped on everyone's radar over the past few years. In recent months...it does seem like the scammers have really upped their game. Here’s what happens…
Shortly after a buyer’s offer is accepted, they receive an email that looks like it’s from their realtor, mortgage lender or even the escrow officer assigned to their new transaction. The email looks very legitimate and requests that they wire their earnest money deposit to the account details provided. And once the buyer has wired their funds to this illegitimate account, they’re gone.
Just before closing, the buyers will receive another email that is supposedly from one of those people requesting that they wire their closing funds. And again, it’s a fraudulent request.
How does this happen?
Understanding how this can happen is key to knowing how to protect yourself. In the above scenarios, the email may look like it’s from your realtor or lender and say their name as the sender. But if you click on it, the email address won’t actually match.
The easiest way to protect yourself is to work with a realtor and mortgage lender that you can easily reach at all times. That way if you do get one of these emails, they are only a phone call or text away from confirming if it’s legitimate.
It’s also important to know that your realtor or lender will never ask you to wire or provide funds to them directly. All money funnels through the escrow company.
Best practice would be to pay your earnest money deposit with a check that is made out to the Title/Escrow company directly. Then at your final signing appointment for the purchase of property, obtain a copy of the correct wire instructions in person – before you wire your remaining funds to close.