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Bay Area consumers alerted to outbreak of hackers stealing mortgage funds

Latest in growing trend of real estate funds phishing scams

In what’s becoming a disturbingly popular trend, Bay Area consumers are being warned that they may be the target of hackers who try to steal mortgage funds by presenting themselves as real estate agents, Realtors and title insurance companies.

Earlier this year, the Federal Trade Commission and the National Association of Realtors issued a nationwide warning to consumers, advising them that they could be the next victims of a mortgage closing cost phishing scheme.

According to the FTC and NAR, scammers are hacking the email accounts of consumers and real estate professionals to obtain information about upcoming real estate transactions.

Then, the scammers send an email to the buyer, posing as the real estate professional or title company, saying there’s been a “last minute change” to the wiring instructions.

The scammers’ email instructs the buyer to sent the funds to a different account, which belongs to the scammers.

Now, the Contra Costa Association of Realtors is warning Bay Area home buyers that they could be targets of similar schemes, one of which cost a local buyer nearly $1 million.

According to the Contra Costa Association of Realtors, “reputable” real estate, escrow and lending companies have secure email networks and maintain compliance with Consumer Financial Protection Bureau privacy regulations.

But the hackers are apparently targeting public domain emails and the private accounts of consumers and real estate professionals, using that access to redirect payments, closing costs and fees from unsuspecting homebuyers into their own accounts, which are often offshore and untraceable.

“This is a frightening new trend becoming more prevalent both nationwide and in our own back yard,” said Ron Mintz, president of the Contra Costa Association of Realtors. “It can happen in an instant, and once it’s done, there’s no going back.”

According to the Contra Costa Association of Realtors, one Danville homebuyer fell prey to this scam and lost nearly $1M in a bogus real estate transaction.

In another Contra Costa County case, a local homebuyer received an email with revised wiring instructions, but called the their escrow officer to verbally verify the request. As it turns out, the revised wiring instructions were actually fraudulent and the result of a hacking.

In another instance, an email address was modified so subtly, with just an added period between the first and last name of the escrow officer, that the potential victim was nearly defrauded.

“We want to send out strong warning to home buyers and real estate professionals to beware of this serious threat and take precautions to protect themselves,” Mintz said. “There is no insurance or other means of financial restitution to protect home buyers who have been targeted in these fraudulent transactions, so it is imperative that consumers verify the legitimacy of all real estate transaction instructions directly with their Realtors and lenders via secured means.”

According to the Contra Costa Association of Realtors, consumers should adhere to the following guidelines to avoid become a victim of one of these scams:

  • Do not respond to or follow instructions from emails, texts, or other electronic transmissions concerning the wiring or transferring of funds without confirming precise instructions by telephone or direct communications with your Realtor and/or mortgage officer through phone numbers previously provided. Do not assume the telephone number or email address listed are correct. Always verify.
  • Do not discuss wiring instructions or any transaction details on a telephone call with someone you have not verified is with escrow, title, or your broker.
  • Do not ever wire funds without first calling your escrow officer at a verifiable number previously provided to you to verbally confirm wire transfer instructions before taking actual steps to electronically transfer funds.

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