At Title | Pipe™, we understand the importance of understanding a topic and solution prior to using a product. Let’s talk about common questions about wire fraud and how we protect your transaction.
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Real estate wire fraud occurs when a criminal provides a buyer of a property with fraudulent wiring instructions that direct closing funds to the criminal’s own bank account rather than the title, settlement, or closing company. There are many ways in which this happens – the email accounts of attornies, real estate agents or settlement representatives can be hacked or spoofed, or a scammer may call a buyer pretending to be a representative of the settlement company to offer the updated wiring instructions.
There are a few reasons why criminals target real estate closings. First, real estate involves large sums of money changing hands, which makes it an ideal opportunity for scammers. These criminals also understand that they can take advantage of the fact that there are upwards of fifteen people involved in a real estate transactions, all which are not made know until different points in the transaction. Homeowners are likely to comply with a request to update the wiring instructions, in order to not lose the home they’re buying, especially when it seems to have come from a legitimate email address. Finally, real estate wire fraud occurs because not enough professionals involved in the home buying process have sufficient safeguards in place to protect their clients.
That is why Title | Pipe™ was created.
If you are a consumer, the best way to protect yourself from real estate wire fraud is to understand the closing process and verify any requests for funds or personal information with the requesting party before sending funds. For example, if your escrow emails you to inform you that funds need to be wired a day in advance, call your escrow officer directly to confirm this information. When you find your next home you may also wish to ask if your REALTOR® uses Title | Pipe™, which offers the best possible protection against real estate wire fraud.
Call your bank immediately to see if the funds can be retrieved or recalled and contact your REALTOR®, lender, and settlement company. Changer your email password in case your account has been hacked. The crime should also be reported to the FBI’s Internet Crime Complaint Center.
It depends. Oftentimes it falls upon the consumer who bears the responsibility, and the repercussions for real estate wire fraud, because they willingly sent the funds, even it was under false pretenses. However, there have been court cases that have found other parties liable, including real estate agents, brokers, and escrow companies. In the end, it is far better to be proactive about preventing wire fraud from happening than determining who is the responsible party. Title | Pipe™ is your single solution to being proactive about preventing wire fraud from happening in your transaction.
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