Are your customers vulnerable to this closing-cost scam?

by Ryan Smith07 Apr 2017

In a rare case of a trade group worrying that the Consumer Financial Protection Bureau isn’t doing enough, an association for the title industry is urging the agency to raise consumer awareness of a scam that attempts to steal money for real estate closings.

The American Land Title Association (ALTA) has sent a letter to the CFPB urging the agency to issue an alert warning consumers about the scam, which is essentially a phishing scheme. In one version, scammers hack the email accounts of real estate agents and consumers to discover closing dates of upcoming home sales. Then they send an email to the buyer posing as a real estate agent or a title company. The email instructs the buyer to send the closing funds to a new account, according to a HousingWire report on the scam. When buyers send the funds, the account is cleared out.

Both the Federal Trade Commission and the National Association of Realtors warned consumers about the scam last year, according to HousingWire. But ALTA said awareness wasn’t widespread enough, and homebuyers are still getting burned.

“Despite efforts by the title industry and others to educate consumers about the risk, homebuyers continue to be targeted,” ALTA CEO Michelle Korsmo said. “With the spring homebuying season underway, it’s vital to continue raising awareness about these schemes. The CFPB should take this opportunity to protect consumers from criminals looking to steal their money.”

The association urged the CFPB to issue an alert that included tips on how consumers could protect themselves and questions to ask in order to determine if real estate professionals had procedures in place to protect their money.

Once the scammer’s victim takes the bait and sends the money, it’s often too late. According to Korsmo, “the money vanishes in minutes.”


Related stories:
Scammer puts fake house listing on Zillow
Former publisher charged in $10 million mortgage fraud scheme

COMMENTS

  • by | 4/7/2017 7:52:33 PM

    Ryan Rodenbeck's mother-in-law aka funder of Classic Title responded to an Email from Joseph Lankow pretending to work for my company and with out calling first to verify the authenticity of the email, wired my commission to a bank account at Jeffco Credit Union that was instantly cleared out. I had Previously instructed the title company by Fax and Voicemail and a phone call to mail my check to me as I would not be sending a courier or requesting a wire transfer as I did not trust their competency. Within minutes of the mortgage funding I called to see if they had followed my instructions and while they had put my check in an envelope to be mailed when they received the urgent email with the Logo of Jeffco Credit union that had been cut and pasted and then they chose to send the over $14,000 commission by wire to Joseph Lankow's account. The message basically said that an emergency had come up and I needed to have the money sent by wire immediately. I asked them to retrieve my money but they did nothing. Later when I took them to court they chose to dissolve the LLC of Classic Title rather than pay me for their error. They even admitted lying to the Judge during testimony and the Judge said that my lawsuit had become frivolous now that they dissolved their LLC.
    Their counter lawsuit for their legal fees was denied. Two other victims of the title company came to the trial but were not allowed to testify as they had been defrauded by the Title company after my loss and not before so there testimony could not be used to show a pattern of incompetence. Because the amount stolen was in my case less than $15,000 the police refused to pursue Joseph Lankow as they said their resources were stretched too thin with other crimes like murder and people stealing larger amounts that demanded their priority. I was able to get a judgement against Joseph Lankow but was not able to recover any of the money.

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