Real Estate Wire Fraud is Real

Unfortunately, there are numerous disclosures in a real estate transaction but just a few that are really important. The disclosure regarding wire fraud is one of the most important forms in a real estate transaction. Real estate wire fraud is a real threat. A participant in the real estate transaction, such as a Realtor, title officer, loan officer, escrow officer can have their email account compromised by malware. The fraudster then monitors their emails for details regarding existing and or new escrows.

The impostors use the compromised email account to send a message to the buyer (or sometimes the seller) regarding wiring the final funds and closing costs. It appears legitimate but the email addresses are usually off by a character or two. The account where the funds are to be wired belong to the impostor and often located overseas.

From June 2016 to May 2018, FBI data shows there was a loss of more than $1.6 billion in the U.S. alone. What’s more, cybersecurity company eSentire reported in October that real estate was the second highest industry hit with malware events in the second quarter of 2018.  It’s not that complicated as there is so much information available online. Real estate websites such as Realtor.com, Zillow, etc. make it simple for a hacker to identify pending home sales (escrows). The fraudsters then monitor the parties involved in the escrow and attempt to hack one or more of their email accounts. Once hacked they can easily review emails and at the appropriate time send fraudulent wiring instructions.

Unfortunately, financial institutions are seldom responsible. Typically these funds are wired overseas making it even more difficult for law enforcement to recover.

Don’t fall victim to wire fraud:

Be aware that real estate wire fraud is real. Follow up with a personal phone call prior to wiring or receiving a wire. Be certain to use a verified phone number (not the phone number on an email). Simply be aware of wire fraud and stay vigilant.