Weak Link: Between the Buyer and Title Company
[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced.]
When it comes to housing-related cyber fraud, home Buyers and Sellers are not equally vulnerable to hackers.
Buyers are much more exposed.
Targeting Consumers (Not the Pro’s)
That’s because title companies act as a buffer between home sellers and hackers, receiving the Buyer’s mortgage funds directly from the lender, then remitting the net sales proceeds to the Seller at closing.
Meanwhile, the Buyer’s lender wires the mortgage money directly to the closing company.
By contrast, Buyers getting ready to move money for closing can be left naked (figuratively speaking).
$100,000 Goes “Poof!!”
Of course, Buyers don’t think they’re naked: thanks to increasingly sophisticated, aggressive tactics — including phishing that looks identical to legitimate Realtor emails, embedded links and malware, and even phone calls to Buyers from hackers impersonating title company employees — Buyers think they’re interacting with official, known entities.
Until they wire funds for their down payment to the wrong place . . . and suddenly $10,000 (or $100,000!) is gone.
To protect its (my!) clients from such predations, Edina Realty took the unprecedented step last week of immediately suspending wire transfers, and instead only accepting cashier’s checks from Buyers at closing.
Smart move . . .
