What is Wire Fraud and How Might I be Affected?

You have just gone under contract to buy a property.  Congratulations.  Now the fun starts.  You will be getting many emails requesting information and sharing information with you.  You will regularly be hearing from the title company, lender and of course your agent.  You will receive title work, requests for additional documents from your lender and documents to sign from your agent.  This is an exciting, happy time, but a time to be careful.  Know who you are sharing your personal information with and know who you are receiving information from. 

In the beginning of the under-contract period, your contact information will be provided to the title company so that they can provide you with title work on the property that you are purchasing.   You will be receiving multiple emails from the title company.  As you progress through the under-contract period you will need to prepare for closing.  In order for you to close you will need to provide money for closing. This money will be the total of your down payment and closing costs. The specific amount will not be known until close to closing.  Your lender will provide you with documents that will tell you the amount of money that will be needed. This money cannot be provided to the title company in the form of cash, personal check or cashier’s check.  Most title companies today require that the money be wired to them in advance of closing, usually 24 hours prior to closing. In order to wire the funds, you will need wiring instructions. Warning…be very careful who you receive your wiring instructions from.  Your real estate agent will not provide you with wiring instruction, nor will the title company call you to tell you what they are.  Instead, you could expect to receive the wiring instructions by a secure email from the title company.  It is wise to also call the title company yourself and verify that the instructions that you have received are correct.  

Why does all of this matter to you?  Wire fraud is occurring in Northern Colorado.  Here is what is happening.  Buyers are receiving wiring instructions that seem very real.  The instructions may look like they come from the title company or even from the real estate agent.  The buyer follows the instructions and wires the funds for closing.  The buyers arrive at the title company the day of closing.  They are told when they arrive that the title company has not received the wire for the down payment and closing costs.  The buyer tells the title company that the money was sent.  The buyers provide the title company with the wiring instructions that they used to wire the funds.  The title company reviews the instructions and realizes that the wiring instructions are not correct and that the money has not been sent to the correct place.   If the buyer is able to tract where money went, they could find that the money is in some off shore account and are not able to get it back.  This has happened more than once in Northern Colorado.  One buyer lost $160,000.  

When this happens, the money cannot be retrieved. Because the money is gone, you will not be able to close on the home that you have under contract that you planned to be moving into.  This is devastating. This is nothing that you want to happen to you. Verify any information that you receive.  Double and triple check.  Always pick up the phone and verify with a human being on the other end of a known phone number (never click links in emails, or correspond/call with emails/numbers provided in emails). Look up phone numbers on Google to make sure you are calling the right person. Do not become a victim of wire fraud.