At a recent event for Realtors® in D.C. , Fox Business News Tonight anchor Lou Dobbs was queried on some of the changes proposed by the Trump administration loosening ‘safeguards’ imposed by Dodd-Frank and the Consumer Finance Protection Bureau.
In response to the question “Shouldn’t there be more rules for Wall Street”? Dobbs replied, “There is simply no way to protect the stupid from the shrewd.”
Harsh but true. Why has the Nigerian Prince scam proliferated for so long? How many grandparents have wired money to bail out their granddaughter held in a Mexican jail? How many of you have wired money to avoid being arrested for missing jury duty, or to rent a cut-rate house, or buy a car online? Statistically a few of you have. Not you, of course.
In coalition with our District Attorney’s office, the Southwest Riverside County Association of Realtors® (SRCAR) has joined other groups including title reps, escrow companies and lenders to form the Real Estate Fraud Advisory Team (REFAT). In place for about five years now, REFAT was originally conceived in response to the massive Stonewood Financial housing scam a decade ago that jump started our foreclosure crisis. Thanks to sharing information on trends we see at the field level together with more aggressive pursuit and prosecution at the county level, Riverside County is no longer a haven for scam artists.
But they’re still around, so the occasional reminder is in order so you can protect yourself. After all, by the time somebody gets prosecuted, somebody else has already been the victim. And you don’t want it to be you. So to help you avoid those pitfalls, here’s a brief summary of the top real estate scams going around.
Anytime you hear the words ‘wire money’ come up in a conversation with someone you don’t know, RUN. The majority of scams involve funds that have been wired. Scammers will come up with a host of compelling reasons why money would need to be sent through a wire transfer. Immediately.
- Wire fraud closing scam. More insidious and costly that the grandkid in jail version, this victimizes homebuyers and sellers at their most vulnerable. Ready to close escrow on your dream home and you get an email with wiring instructions for your closing funds. Trouble is, somebody hacked your info and you just wired a bunch of your money somewhere. And there’s no take-backs. You may not even notice for a day or two, until your escrow company calls with the real instructions. NEVER trust just one source. Call the escrow company to verify wiring information. Call your Realtor® to check. Protect yourself.
- Elder abuse. Sad to say this type of abuse currently ranks 2nd in frequency. It’s no secret that older folks are preyed upon by all manner of charlatan and they end up losing their homes, their savings and any security they had built. If you feel like someone’s trying to fast-talk you, call your family. If it’s your family that’s doing it (yeah, it happens), call the District Attorney. If a Realtor® sees a questionable situation, they are obligated to bring that forward for review. I’ve heard two in the last two days.
- Rental scam. Generically referred to as the ‘Craig’s List’ scam, people trying to rent a house in this tight market see an ad for a nice home renting below market. The ‘owner’ has been deployed or transferred and they need a quick deal. They’ll be back in five years so don’t want to sell the house, just rent to the right person. Which happens to be you? Please wire your 1st and last month’s rent, they’ll waive the security deposit, and they’ll call their neighbor to release the keys to you tomorrow. Neighbor says ‘you’re the 8th person came by this week for keys. I have no idea what you’re talking about.’ Bye bye money
- Rental scam II. You stop by a rental open house on the weekend. Vacant house, owner gone, need to rent quick, cheap. Wire the money Monday and move in Tuesday. Key’s in the lockbox, here’s the code. You and 11 other families all show up Tuesday with your U-Hauls but no keys, no agent and a ‘For Sale’ sign in the yard. Was that there Saturday? Did you notice, honey?
Here’s a couple free tips – and worth every penny. If somebody you don’t know asks you to wire money – RUN! Verify with at least two trusted sources before wiring money anywhere, anytime, anyhow. Tip II – ‘If it sounds too good to be true…’ Well, you know.
Got a question about real estate fraud? Email firstname.lastname@example.org.