My Real Estate Wire Fraud Story
It was the spring of 2017, and I had been saving for a down payment on my first home for a lonnnnnng time. After searching for what seemed forever, we found an adorable craftsman style home from the 1930's that had been remodeled just right. It even had my dream feature - a clawfoot tub in the master bath! The last thing I was thinking about at that time was real estate wire fraud.
Needless to say, I was smitten with this house. I had saved for several years and was ready to put my 20% down - which amounted to about $52,000.
I don't know how closings are supposed to go - as this was my first time - but the experience was really stressful. I felt the process was rushed, and my questions via phone and email went unanswered, so finally closing on the house and being done with all the paperwork and the flurry of emails would have been a welcomed relief.
Needless to say, my closing was not a relief. I was the victim of real estate wire fraud, an alarmingly growing scam, that took $52,000 of my hard earned cash.
I have to say, I was REALLY lucky in being unlucky. We caught the scam within two hours of closing, but it would be three weeks and hundreds of phone calls, consulting with a lawyer just for advice, and a few sick days from work before I would find out if we could save my down payment and thus, my house.
It Happens ALL THE TIME
If you're reading this site, chances are this terrible thing happened to you. You were getting ready to wire your funds over to a title company, and you received an email that contained fraudulent account information, rerouting your down payment to thieves.
It's scarily common how often a hacker can get in to a title company or real estate agent's emails, watch them go back and forth, and wait for the moment to pounce. There's also a good chance they got a hold of the official letterhead or your very closing documents to do a seamless bait and switch, so days can go by before you realize you were sent a dupe.
I'm going to be real with you - the real estate industry is not doing enough to inform and protect consumers. After it happened to me, I called everyone I knew who worked in real estate and they all had heard of real estate wire fraud. Yet, of all the recent home buyers I spoke to, not one had ever heard of it.
That is, unless it happened to them.
Why is this happening? Where is the communication breakdown happening?
Needless to say, people are not being warned sufficiently, or sometimes, at all. It would take a real estate agent, title company, or loan officer THIRTY SECONDS to warn consumers of the proliferation of the scam and what to look out for. It should be a conversation that happens by all three institutions, and yet, nobody does it.
Why? It's free. It's easy. It could be a conversation in one of the MANY correspondences or face to face meetings you have during the home buying process. Not to mention, it saves everyone time and money to have such a ridiculous talk. I just don't understand.
Since it's happened to me, I have heard of people losing $90,000, $150,000, and more. It's ruining lives.
I was luckily able to save my down payment after three terrible weeks. As mentioned, I caught on to the scam 2 hours after the money was being wired and immediately called both my bank and the recipient bank.
For my case, the banks finally told me after nearly a week that my money was frozen before it left the bank. They didn't want to tell me too much because it seems to be quite the thorny situation and you too may experience calls with no information for weeks.
My money sat at the fraudster's bank for several weeks. The banks couldn't decide "who was at fault." One wanted a "holds harmless" letter, and the other wouldn't issue it. You may find, like I did, that institutions want to protect themselves - the banks, the title company, the real estate company. They all know the game and they have really good legal teams.
I tried to tell both institutions that nobody was at fault, it was a fraudster, and to please return my money- to no avail. Because of privacy laws (which are typically a good thing) the bank would need to get the cooperation of the fraudulent bank account's owner to return my funds, and couldn't tell me much more.
I have to say, I had an amazing case worker at the FBI in my city. Eventually the situation became so frustrating, that he stepped in. From what I was told, it was the open FBI investigation and the incentive of "cooperation" that got the bank account holder to hand over my funds.
What About the Not-So Lucky?
It kills me to say it, but from what I have learned, most people are not as lucky as I was. In most real estate wire fraud cases, you don't catch it that fast. It might be the next day, or a few days.
If your money has already left the recipient's bank account, it can be gone already, and when it is, I was told by all involved, that it's likely gone for good. I hate writing that to you - as I know most people reading this are going through a personal hell - but I wish someone had been honest with me from the beginning.
What I would recommend to you, assuming you've already filed with both banks to report the fraud, filed an IC3 report, and filed a police report, that you now find a good lawyer. (If you have yet to do these first steps, take a look at my Stolen Down Payment? Here's What To Do First.)
Unlike credit card fraud, your money is not protected or insured with a wire. Also, the banks are usually NOT at fault. The horrible thing is that YOU, the victim, initiated the wire. There is a chance you can sue, but please speak with a professional to assess the unique circumstances of your situation.
I share this with you to help you navigate the personal hell that is real estate wire fraud. You will likely feel hurt, betrayed by the professionals who should have protected you from a largely known problem, and, probably, overwhelmed, stressed, and enraged.
I hope this site will help you figure out who to work with and what to focus on so you don't waste any precious time.