Most real estate closings are routine for Tom Hundman, a managing attorney with the Frontier Title Co. of Bloomington, Ill., so when something doesn't appear right, he knows to check into it.
Last Friday, for instance, about 15 minutes after closing a transaction, he received an email that the buyers had changed their minds and the bank insisted on a 14-day hold. The email requested he immediately divert the funds to a specific wire account.
"We have policies in place where we won't wire funds on the basis of an email," he said. "You have to check with the seller, the attorneys and everyone connected with it. In this case, nobody knew anything about it because it wasn't true and someone was just trying to fraud us. We ignored the email."
Such stories are common, said Linda Grahovec, a member of the Illinois Mortgage Fraud Task Force with over 30 years of real estate transaction experience. She was the featured speaker at a fraud seminar Monday morning at the DoubleTree by Hilton in Bloomington. About 100 Realtors, attorneys, and financial lenders attended the session.
"When you have a feeling something is wrong, when that hair on the back of your neck stands up, then that is a good indication you need to do some research," Grahovec said. "You have to pick up the phone and check into things."
Hundman said policies such as not approving wire transfers based on emails are a good starting point, but communication with all involved parties is also a useful tool.
Hackers have the ability to gain valuable information during financial transactions and Grahovec said attorneys and Realtors are becoming increasingly susceptible.
"There have been hackers out there for years," she said. "Sometimes those who are in the real estate professions do so many closings day in and day out, they put aside the fact that it's real money. But the criminals know it's real money."
There are many types of fraud attacks, Grahovec said.
"If it hasn't happened already, someday, somebody, somehow, is going to attempt to hack into your computer system," she said. "Fraudsters are reading your emails unbeknownst to you. If you can imagine someone just sitting, waiting and collecting information about you or your clients on your computer, that's what is happening. It's creepy."
Grahovec suggested using as many safeguards as possible to prevent scams and fraud attempts. Those include building firewalls and changing passwords to accounts.
"Anyone in the financial services industry handles non-public information every day," she said. "There are property reports with names, addresses, social security numbers and all kinds of information that hackers seek. It is best to spend a little bit of money and time on some extra security measures, than to wind up being scammed."
