7 Proactive Ways to Prevent Real Estate Wire Fraud
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Homebuyers often wire funds when it’s time to close on their new property. In most cases, it is a convenient and safe way to transfer a large sum of money.
But in 2021, the FBI reported that 11,578 people lost a staggering $350,328,166 in real estate-related crimes, an increase of 64% from 2020. While not all those losses were directly related to mortgage fraud, scammers are becoming increasingly more deceptive in tricking potential homebuyers out of their money at closings.
When things are moving fast, emotions are running high, and the paperwork can seem overwhelming, it can be easy for a client to overlook important details or red flags. As a real estate agent, you can play a vitally important part in helping to protect your clients from these devastating losses.
Here are some important tips to share with clients before they wire money:
- Work with professionals, including mortgage lenders and title companies, that have been recommended to you by others you trust.
- Visit your mortgage lender in person to establish a trusted line of communication with your loan officer. Obtain their primary contact information so you have that on hand for when questions or concerns arise.
- Lenders will never ask their customers to share personal information, such as a social security number or pin number, via a phone call, text or email. If you need to contact your lender, always call a number you know is valid. If you have to look the number up, check carefully that everything in the website’s URL looks correct and that there is a lock symbol in the address bar.
TIP: The Google Safe Browsing Transparency Report allows you to paste a URL into a field, and it gives you a report on whether you can trust that website.
- Take your time when reviewing documents and don’t be embarrassed to ask questions if there is something that is unclear or does not look quite right. If someone is pressuring you to do something faster than agreed upon or has a last minute, urgent change, consider that a red flag.
- Never share personal or financial information via email and do not click on any links. Scammers may subtly change a font to make it look like a valid email address. They may also infiltrate an email chain (known as a cybercrime called “phishing”) so that you think you are still communicating with trusted professionals but in fact you are not.
- Stay extremely vigilant as the closing date nears. If you receive unexpected or last-minute requests to alter the designated bank account or payment instructions, contact your trusted professionals in person or at a verified phone number. Scammers have been known to impersonate your trusted professional and change the wiring instructions.
Tip: Identify two trusted individuals to confirm the closing process and payment instructions. Consider creating a code phrase known only by the trusted parties as a way to confirm identities over the phone.
- Stay in touch with your professionals the day of the closing via a call at a trusted number and monitor the process to confirm monies have been wired properly. If you suspect funds have been transferred to a fraudulent account, contact your lender immediately and ask for a wire recall. You can also file a complaint with the FBI’s Internet Crime Complaint Center.
Never feel foolish or like you are “bothering” any of your trusted professionals with your questions or concerns. Most likely, this will be one of the most significant amounts of money you will ever spend. While your professionals’ jobs are to ensure your transaction goes according to plan, ultimately, it is up to you to protect your money and ensure it is deposited into the proper account.