BBB warning of real estate scheme targeting home buyers

BBB warning of real estate scheme targeting home buyers

PROVIDENCE, R.I. (WPRI) — The Better Business Bureau and the Federal Trade Commission are warning residents of a new scheme that targets home buyers as they’re preparing to close on their property.

Because of the new scam, the FTC said your bank account could be wiped out in minutes.

“If you’re in the very stressful situation of buying a new home, oftentimes you are moving so quickly in the process that you’re not sure exactly what to do or where to go – or who to write the check out to,” said Paula Fleming with the BBB. “And scam artists are taking advantage of this.”

According to the BBB and FTC, hackers have been breaking into some buyers’ and real estate agents’ email accounts to get information about upcoming real estate transactions.

Then, the hackers send emails to the home buyers posing as a real estate agent or someone from a title company.

The scammers instruct the home buyer to wire closing costs to a certain account – and people are falling for it because the emails look official.

“Oftentimes, people don’t realize they’ve been duped until they sit down to actually sign off on the paperwork,” Fleming said. “And they they’re asked for the check and they say we’ve already wired the money.”

According to Fleming, once you wire the money, you’re more than likely not going to get it back.

Here’s how to protect yourself:

Don’t answer unsolicited emails – and never email financial information because email is not secure.
If you do receive an official-looking email and you have questions about it, your best bet is to pick up the phone and call your real estate agent. He or she will be able to quickly tell you if the email is legitimate.

Source: WPRI.com Eyewitness News, Susan Campbell
http://wpri.com/2016/05/17/bbb-warning-of-real-estate-scheme-targeting-home-buyers/

Realtors behaving badly - Fremont man sentenced to a year in jail for real estate fraud

Fremont man sentenced to a year in jail for real estate fraud

A Fremont man who pled guilty to charges alleging elder financial abuse and grand theft last month surrendered himself at Santa Rita Jail in Dublin on April 1, the Alameda County District Attorney's Office reported.

Real estate agent Jeremiah Bishop, who was 74 at the time of his arrest in April 2015, was also ordered to pay $422,522.38 in restitution to 14 victims on March 25 in Hayward. Bishop pled guilty before trial, Deputy District Attorney David Lim said.

Fremont Police Department said Bishop advertised himself to potential victims as a commercial real estate investor with a partner starting in 2006. However, the partner did not exist and the properties Bishop sought investors for were not actually for sale, police said.

One of Bishop's victims, Union City resident Richard Aug, said he is disappointed in the outcome of the sentencing and believes Bishop was "not as remorseful as he should be."

Also, due to his age, health and other factors, Bishop could end up serving less than six months in jail.

"That's horrible, that's deplorable," Aug said.

During the course of nearly 40 years, Aug and his children made six property transactions -- buying and selling -- with Bishop. He became so trusted and treated as a family member that Aug's children called him "Uncle Jerry."

However, the relationship was shattered a couple years ago when a $25,000 investment did not yield a return in nearly a year.

Another victim, Alameda resident Frances Lai, said she and the other victims walked out of the sentencing court sad due to the lack of additional jail time for Bishop, under what she described as a "generous plea bargain."

"By using his ruthless operation of a Ponzi scheme, he has heartlessly robbed people, including elders, of their hard-earned savings, causing them undue financial and mental stress, and most of all, exploited his own close friends, clients and colleagues and betraying their trust in him. I don't know how he can live with his own conscience," Lai said in an email, recalling what she said at the sentencing during the victims' chance to speak.

Lai said she first met Bishop when she joined Century 21 Mission-Bishop real estate company, 39180 Liberty St., as a rookie Realtor in 2012.

"He was my trainer and mentor," she said.

After not making a single sale in more than a year, Lai left the company in 2013. Shortly afterward, Bishop contacted Lai about high-return investments in which she ended up losing $22,500 in a year's time.

"I started to suspect it was a scam, but I didn't know where to turn to, as I had never experienced something like this before," Lai said. "I couldn't sleep for months, and was suffering from intense distress and anguish besides the financial crunch due to his non-payment of the loans."

Source: San Jose Mercury News, Julian J. Ramos
http://www.mercurynews.com/ci_29771297

HACKERS CONTINUE TO PERPETRATE WIRE TRANSFER FRAUD IN REAL ESTATE TRANSACTIONS

About one year ago, our column dealt with the subject of wire transfer fraud in real estate transactions. Regrettably, the topic is still a current one. On December 15, NAR issued an alert on the subject. Anecdotally, incidents have increased in the Southern California area. The nature of the scam is unchanged, so what was said last year is still on point. It goes as follows.

Wire transfer instructions are emailed to the buyer. The buyer complies with the instructions to the letter. The next day, escrow contacts the buyer asking if the money has been sent yet. The buyer checks with his bank and is assured that the funds have been transferred out. When the money has still not shown up, everyone begins to retrace steps. As it turns out, the wiring instruction was bogus. The email came from an address that looked very much like that of the escrow or title company, but it was not actually theirs.

And the recipient bank account? It was real; it just wasn't the correct one. And, yes, it has been emptied out by now.

The scheme has been perpetrated by hackers, and it has been going on around the country for a while now. Chicago Title put out an alert that described the steps involved. We summarize them here:

First, hackers identify the email accounts of real estate agents and brokers. Then they hack directly into the accounts "and identify emails referencing pending real estate deals. From these strings of emails, the hackers pull out specific details about the deal, such as: (a) the parties' names, (b) the title company involved, (c) the escrow officer in charge of the deal, and (d) other information specific to the transaction."

Next, they send fraudulent email "directly to the buyer or lender, making it look like it was sent by the real estate agent, mortgage broker, or escrow agent. These fraudulent emails now direct the buyer and/or lender to wire the funds necessary to close escrow directly to a different bank account than provided in the preliminary report or in the escrow instructions. Obviously, this new bank account is controlled by the hacker, not the title company or the escrow holder."

Then, if the buyer, or the lender, does not detect the fraud, "the money is wired to the bogus account controlled by the hacker and is immediately withdrawn. Due to the amounts involved and the complex nature of investigating and prosecuting wire fraud, the odds are that the authorities will do nothing to help in these instances." [my emphasis]

For the most part, prevention recommendations tend to focus on the non-secure nature of most email accounts. It's a fair bet that most real estate agents do not have secure accounts and they can be easily hacked. But, in a world where Target, Sony, and the Defense Department get hacked, it is not plausible to think that most agents, escrow companies, and clients are ever going to enjoy a very high level of security.

While suggestions like two-factor authentication and encrypted emails may have their place, it is refreshing that a practical, non-technical word of advice comes from, of all places, an alert put out by the Silicon Valley Association of REALTORS®. To wit:

"Buyers and sellers should confirm all email wiring instructions directly with the escrow officer by calling the escrow officer on the telephone. In that conversation, the correct account number information should be repeated verbally before taking any steps to have the funds transferred."

Certainly, if wiring instructions are changed via email, the buyer should confirm that by phone with the escrow officer and the buyer's real estate agent.

Source: RealtyTimes, Bob Hung
http://realtytimes.com/consumeradvice/buyersadvice1/item/41183-20151229-hackers-continue-to-perpetrate-wire-transfer-fraud-in-real-estate-transactions

Be weary of the loan mod crooks!

In this market, at least hear in the Silicon Valley/San Jose area, for the moment, you don't see as many home owners looking for a loan modification. But just a few years ago there were lots of homeowners who were looking for a loan modification if they didn't want to sell their home. One danger I warn homeowners about who are seeking a loan mod is too be careful and keep an eye out for the con-artist and sharks out there looking take advantage at the owners expense.

Utah group charged with mortgage modification fraud



Loan Mod Fraud Avoidance Tips