Just this week, in Oklahoma, I became aware of a fraudulent request to wire closing funds.
The following transpired:
The title company emailed the real estate agent the settlement statement for review. The real estate agent downloaded the document and emailed the statement to the buyer along with information and questions about the final walk through.
The next morning, the buyer began receiving emails from what looked like their real estate agent (i.e., same picture, name and signature line), however, unbeknownst to the buyer, the email address was different.
The emails received by the buyer were as follows:
- “Good morning, this is a friendly reminder about your closing funds. Please make payment today to ensure a smooth closing. I will send you wiring instructions once you acknowledge receipt of this email by return reply. In order to close on Friday the title company will need the funds in advance so that funds can be disbursed the same day.”
- Buyer responds – “Closing funds means closing costs?”
- “Cashier’s checks at the closing table will no longer be accepted for closing. Banks are now placing a hold on these funds and HUD requires funding the same date of the closing. All funds must be in the form of a wire transfer and must be credited to their Escrow Trust Account.”
- “See below wire instructions, your wire amount is $_________.00, please ensure wire is sent today and send me an email once completed.”
The buyer then calls their real estate agent and says, “Yeah, I have a question about the wire transfer.” The agent immediately responded, “What wire transfer?”
Fortunately, the buyers checked with their real estate agent before transferring the funds.
After obtaining all corresponding emails, the real estate agent notified the state authorities, Oklahoma Association of REALTORS®, Closing Title Company, Bank listed to receive funds and has filed an Internet Crime Complaint with the Federal Bureau of Investigation (FBI).
According to sources wire fraud schemes have become increasingly common and sophisticated. Real estate licensees are encouraged to inform their buyers and sellers of this fraudulent practice and to validate any new payment instructions.