A Warning to Your Buyers: Closing Scam

March 21, 2016

The Federal Trade Commission and the National Association of REALTORS® issued a warning to consumers to be mindful of a growing mortgage closing phishing scam that could leave buyers with no down payment.

In the warning, FTC and NAR say that scammers are hacking into the e-mail accounts of consumers and real estate professionals in order to access information about the closing date. The hackers will then send an e-mail to the buyer and pose as the real estate professional or title company. In the e-mail, hackers will say there’s been a “last minute change” to the wiring instructions for the funds for closing. They will then instruct the buyers to send the funds to a different account, which really belongs to them.

A buyers’ bank account could be cleared out in a “matter of minutes,” and they aren’t likely to get it back, according to the FTC.

“If you’re buying a home and get an e-mail with money-wiring instructions, STOP,” the FTC posted in its bulletin. “E-mail is not a secure way to send financial information, and your real estate professional or title company should know that.”

NAR is working with the Federal Trade Commission to warn consumers about this latest scam targeting buyers during closing.

“Buyers should be wary of sending financial information over e-mail, downloading attachments, or responding to e-mail requests to wire money in a real estate transaction,” warns NAR President Tom Salomone.

Source: “Homebuyer Beware: FTC, REALTORS® Issue Warning on Mortgage Closing Cost Phishing Scheme,” HousingWire (March 18, 2016) and Federal Trade Commission