Wire Fraud’s Impact on Homebuyers
On Friday, the Coalition to Stop Real Estate Wire Fraud marked its launch with a press call, during which U.S. Senator Doug Jones alongside industry experts, including an affected victim of wire transfer, discussed the real estate wire fraud epidemic.
Speakers included Jones, Cynthia Blair, Attorney, and President of the American Land Title Association (ALTA), Rich Hopen, real estate professional and victim of real estate wire fraud, and Tom Linehan, EVP at BankUnited.
According to the Coalition, real estate wire fraud is a sophisticated scam targeting individuals making wire transfer payments during the home buying process. FBI data reveals that 11,300 victims lost a combined $149 million due to real estate wire fraud in 2018 alone, representing a 166% increase in the total money lost compared to 2017.
“One of my constituents in Alabama lost $250,000 to this scam,” Jones stated. “Another ost $12,000. Each and every dollar lost is so important to these homebuyers.”
According to the FBI, only an estimated 12-15% of all fraud is reported, and the Coalition notes that the best way to combat these statistics is through educating the homebuyer. Homebuyers, particularly first-time buyers, are the ones who are the most at risk of wire transfer fraud.
“While it’s important to educate all consumers about the threat of wire transfer fraud, first-time homebuyers are especially vulnerable to this crime,” said Blair.
Rich Hopen, a real estate professional, was a victim of real estate wire fraud.
“Our $239,000 mortgage payoff was wired into a criminal’s account,” Hopen said. According to Hopen, education isn’t only necessary on the consumer side, but on the real estate professional side as well.
“Most real estate professionals know of the problem, but they don’t understand how it occurs and what to do to prevent it,” Hopen stated. “Buyers and sellers are unaware of real estate wire fraud.”