Whenever a system is put in place to stop fraud, there are crooks smart enough to get around it. It’s frustrating to build a better mouse trap and end up with a bunch of smarter mice! That’s kind of what happened to presenting a cashier’s check at closing for the costs. The closing is supposed to be the finish line for the buyer, when everything is wrapped up, with every i dotted and each t crossed. Or at least that’s the way it’s supposed to go.
However, there’s a scam out there that takes advantage of homebuyers. This scam takes the money intended for the closing and puts it into the pockets of people who not only have nothing to do with the closing, but nothing to do with any of the parties at all. They’re crooks, and they can take that money, disappear, and there’s nothing that anyone can do to get that money back. The Chicago Tribune notes that during the boom years, crooks using high quality printers managed to forge very convincing cashier’s checks at the closing. Title companies and closing agents took a beating, and since that time they’ve resorted to requiring that the closing monies be wired to their account so that they can be sure to have enough to cover all the disbursements.
Now the new scam involves hacked email accounts and the bad guys sending emails that purport to be from your agent, title company, or even your lender, and what happens to your earnest money, closing money, or even your down payment can scuttle your home purchase. Essentially, the bad guys are spiders in a web, waiting for an exchange of emails that indicate a purchase in progress, and they will wait until they know you have that cash in hand. The Washington Post has the lowdown, and here’s what they do:
- You get an email from your broker, agent, lender or the title company agent. They give you instructions on when and where to send your wire transfer, or advising you of a change to those arrangements.
- You wire the money as instructed.
- You get a call later from your broker, agent, lender, or from the title company asking where the funds are and why have you not sent them.
These guys are patient, and can wait for a sizable purchase to pop up on the radar before they strike. What you need to do is to take sensible precautions in order to protect your financial interests. When you get an emailed request from someone, look at where the money’s going, call your contact at the number you have (not the one in the email) to confirm that the instructions are legitimate, and then confirm that the account is indeed a legitimate account number. Much like the Nigerian Prince scams, these rely on accounts of gullible third parties or sham companies to accept the wire transfer. You are your own best protector – keep your information secure!
Before you send your money, read your wire instructions and never wire money to a company other than the intended company.