FOR IMMEDIATE RELEASE

Cortes & Hay, a title insurance agency with over five decades of experience serving New Jersey’s residential and commercial real estate markets, announced a new resource aimed at helping New Jersey homebuyers look out for - and protect themselves against - real estate wire fraud.

“Real estate wire fraud is one of the most common and costliest scams in the industry across the United States,” said Justin Hay, President of Cortes & Hay. “It’s a growing problem across the country; in fact, the FBI says that over $446 million in valuable assets are lost to scams annually. Here in New Jersey, with our high property values and an enormous volume of transactions, real estate wire fraud is something that all homebuyers should be aware of - and protect themselves against.”

Published now on cortesandhay.com, the new post from the expert industry leaders at Cortes & Hay outlines what New Jersey property buyers and others involved in the process need to know about real estate wire fraud. It includes:

What is Real Estate Wire Fraud?

Real estate wire fraud is considered a “Business Email Compromise,” or “BEC” scam. In these scams, criminals impersonate legitimate closing emails to fool buyers and sellers into wiring funds to a criminal-controlled bank account. They usually target large wire transfers ranging from tens of thousands to hundreds of thousands of dollars.

These scams typically occur during and around real estate closings, preying on the stress and flurry of paperwork to take advantage of buyers and other participants in the process. It’s especially vulnerable for first-time buyers, who are even more susceptible to bad actors in an unfamiliar process.

As soon as the wire transfer hits the criminal’s account, the fraudster will usually move the funds into other accounts (most often in other countries), making it incredibly difficult for authorities to recover the money. The FBI, in fact, ranks real estate wire fraud among the most financially damaging cybercrime categories.

It’s also important to note that this type of fraud is NOT a title defect. It requires different kinds of protection than traditional title insurance.

What are the Four Steps to a Real Estate Wire Fraud Scam?

The four steps to a scam everyone should look out for are:

1. Compromising an email account. This is when criminals gain access to the email account of a key individual or individuals involved in the closing. After they gain access, they’ll study the email patterns to prepare for a fraudulent email.

2. Sending a fraudulent email. In the period before the closing, criminals send an email to the buyer or another party with “updated” instructions on where to wire the funds, perhaps citing a “banking security update” or an “account change for security.” These scammers will use email addresses that are very similar to the real ones, perhaps with only a single letter or character changed.

3. The money is sent to the criminal’s bank account. Fooled by the criminal, an individual wires the money to that bad actor’s bank account. In New Jersey, the amount could go into the hundreds of thousands of dollars.

4. Discovery of the fraud. This type of fraud may not be discovered until the actual closing, when all parties involved discover that the money is not where it needs to be. By that time, the criminals may have moved the money into different accounts around the world, making it nearly impossible to recover.

What should buyers look out for with real estate wire scams?

Here are the big things buyers in New Jersey should be aware of:

• Last-minute wiring instruction changes. No legitimate title agency will make a last-minute change to its processes. Treat any email of this kind with the utmost scrutiny.

• Urgency or high-pressure tactics. There may be some kind of “ticking clock” pressure put on the buyer - perhaps a “must send today or risk a delayed closing” message. These tactics are trademarks of the scammers.

• Email address variations. Look for slight variations in the email address - hyphens, extra letters, or different (but similar-looking) email domains that resemble the authentic address, but are just a little off. It’s very easy to get fooled, especially at a quick glance.

• Requests to keep the change confidential. Confidentiality requests should immediately raise a red flag. Legitimate parties will NOT make these kinds of asks.

What else should buyers know to protect themselves against real estate wire scams?

The first thing buyers should do? Establish a verbal protocol with the title agency or attorney about writing instructions; have a phone number handy to verify all wire instructions, and make sure that phone number is given directly to you and not sent in an email from another source. Treat all incoming emails as potentially fraudulent and double-check all information. Carefully check each email sender’s full address, not just the display name. Check in with your title agency and attorney about their cybersecurity practices to ensure your safety.

On the closing date, contact all parties involved by phone at a number you’ve independently verified before and after the money is sent. Send the wire as early in the day as you can to give the authorities time to reverse the loss if fraud does occur. Most importantly, if you think anything is off, don’t wire any money; a delayed closing is always preferable to financial losses. If you do suspect fraud has occurred, contact local authorities and the FBI’s IC3 division immediately.

It’s also important to note that standard title insurance does not cover wire fraud losses. The best defense against real estate wire fraud is through the prevention measures detailed here.

About Cortes & Hay

Cortes & Hay offers over 50 years of experience in residential, commercial, and industrial title insurance. Our veteran leadership provides a wide range of expertise, from multiple-tract assemblage to improvements on leased land or residential subdivisions, giving our clients the confidence and peace of mind they deserve in their title insurance transaction. Additionally, Cortes & Hay specializes in 1031 exchanges and settlement services, including property sales, purchases, and refinancings, as well as attorney-assisted closings.

As a commitment to our clients and everyone we do business with, Cortes & Hay takes the strictest steps to conform with all industry standards set by the American Land Title Association’s (ALTA’s) Title Insurance and Settlement Company Best Practices.

Cortes & Hay has two convenient locations in New Jersey (Flemington and Hoboken) and proudly serves the entire state.

Contact Information:

Cortes & Hay Title Agency, Inc.

110 Main Street St #1
Flemington, NJ 08822
United States

Michele Caporin
(908) 782-8850
https://cortesandhay.com/