We’ve heard of scams that often cost victims hundreds or thousands of dollars, which is bad enough.
But a mortgage title scam that almost victimized an Akron-area man could have cost him what could have been a life savings for many — tens of thousands of dollars, in the high five figures.
Luckily, he and his credit union mortgage specialist realized what was happening before the money was wired.
This scam apparently has been around for a few years, but may just be hitting the Akron area.
The Akron man is no stranger to buying houses. He’s bought two other houses in his lifetime.
He asked for anonymity and didn’t want to publicize the exact amount he could have lost since he felt violated by the potential scam.
Nationally, the scam has victimized others, including a couple who lost $1.5 million, according to an August Associated Press story.
Here’s what happened to our local homebuyer, and it’s very similar to the national scam:
He was going to close on an Akron-area house on a recent Monday. On the Friday before, he went into Towpath Credit Union to meet with Amanda Sibera, his mortgage specialist, to go over paperwork.
He needed to wire money to a bank in California. Federal rules require any payments over $10,000 to be wired.
As the homebuyer was sitting with Sibera on that Friday morning a few weeks ago, the two were reviewing the wiring instructions that Sibera had from previous transactions. All they needed was to confirm the loan number and bank routing numbers.
“It’s good to have another set of eyes on this. This is a lot of money,” the homebuyer told me. “We literally touched each letter and number with a pen.”
Here’s where it gets weird and scary.
They were on the phone with the title company representative. She said she would email the wire instructions within two minutes.
When the buyer opened his email, he already had a message that appeared to be from the title company representative. He did not immediately notice that the email had actually come a few hours earlier.
“This had the correct dollar amount to the loan to the penny. Even though I had opened it, Gmail had flagged it as suspicious,” he said.
Sibera said the email also instructed the homebuyer to wire the money on Friday “to not cause a delay in the closing. That was the trigger word. It was Friday. He wasn’t closing until Monday. The title company didn’t technically need the funds until Monday.”
When the homebuyer and Sibera phoned the title agent back, they asked if she had sent her email. She said no, she was working on it.
When they looked more closely, they noticed though the email appeared to come from the title agent, the reply message was to a random Gmail account. The listed bank also was in a different state than the actual bank he was using.
The homebuyer “was obviously very afraid of what was happening. He felt like his whole life could have just been gone,” Sibera said.
According to other news reports and warnings from the Federal Trade Commission and the National Association of Realtors, the scammers are likely hacking into email systems of those associated with home closings and consumers’ emails in order to see in real time names and exact amounts of down payments in order to send what looks like a legitimate email.
The American Land Title Association, the national association for title companies, has been trying for two years to educate its members and consumers about the fraud, association spokesman Jeremy Yohe said.
“These hackers interject themselves at the moment when it seems legit. As the buyer, the person just wants to get the keys to their house,” Yohe told me. “We are hoping consumers become aware that this hacking is possible and could steal the funds for their home.”
The title company used in the local homebuyer’s case, First American Title, referred questions to its corporate headquarters. The corporate headquarters, in turn, referred me to Yohe’s organization.
“Our members — attorneys and title companies — have taken many steps to try to combat this problem … but these criminals are smart and are constantly altering their tactics to steal the money,” Yohe said. “Fortunately in this case, [the homebuyers] didn’t lose the money.”
First American Title has a fact sheet on its website warning its agents of the growing wire fraud scam at closing. It suggests agents use a safe phone number to contact the homebuyer, not to rely solely on emails. In some cases, agents have begun requiring an in-person meeting to finish the wiring instructions.
Additionally, the national organization said to be wary when wiring information changes at the last minute.
The homebuyer continued to get emails from the would-be scammer.
“I did get two other follow-up emails on late Saturday or Friday asking “Did you send it? You’re in danger of jeopardizing your closing,’ ” the homebuyer said.
In the end, he successfully closed on the house and wired the money to the right bank by the deadline.
He and the folks at Towpath Credit Union hope by sharing his story, it will prevent anyone else in our area from losing tens of thousands of dollars in this scam.
Said Sibera: “I hope this is the only time. [Closing is] never a fun process.… This should be one of the best days of their lives, not one of the worst.”
Now for some housekeeping items. In Friday’s business section, I wrote a short story saying Dominion Energy Ohio’s annual auction to determine the formula for the monthly Standard Choice Offer (SCO), which I continue to recommend, came in at a low rate. It wasn’t as low as the previous year, which was 0 cents, but the new “adder” price to determine the monthly rate came in at 7 cents per thousand cubic feet (mcf). That translates to a $7 yearly increase since the average homeowner uses 100 mcf a year, and is much better than some years, when that adder was several dollars. You can read more about it at http://www.ohio.com/betty.
Also, I have been getting questions about a letter from the NOPEC aggregation that many residents have received. I wrote a column two weeks ago about that aggregation. You can read it in the Jan. 27 newspaper or online.
Beacon Journal consumer columnist and medical reporter Betty Lin-Fisher can be reached at 330-996-3724 or [email protected]. Follow her @blinfisherABJ on Twitter or http://www.facebook.com/BettyLinFisherABJ and see all her stories at http://www.ohio.com/betty.