Road to the own house

5 Tips for Easier Real Estate Closings

The homebuying process is filled with excitement, joy, anxiety, stress and relief. There are so many moving parts between deciding to purchase a home and actually closing on a home. Here are excellent tips to help buyers navigate the closing process and ensure a smooth closing for all parties.

Don’t make big life changes or purchases during the home buying process. Don’t change jobs or make purchases that could change your credit score. Examples include financing new furniture or a new car, moving your money around in your accounts or paying for a vacation using your open credit. Don’t do anything that will send red flags when lenders check on your credit.

Assure the title is cleared. Your real estate attorney or title company is responsible for ordering a title report to assure everything is good before the closing. Stay in close contact with them to make sure there are no liens on the property. Liens may delay or cancel your closing.

Create and maintain a repair timeline.Assuming the seller is expected to make certain repairs on the property, make sure you document those repairs (and a deadline for their completion) and share a copy with the seller. Maintain the list and verify, at least several days before your scheduled closing, that the repairs are completed. Schedule a final walk-through the day before closing and verify again that all repairs are completed as agreed upon.

Secure proper homeowner’s insurance. Buyers should shop for and secure homeowners insurance well in advance of the closing. Be cognizant of the home’s location and know if you need to purchase flood insurance. Flood insurance is costly, yet necessary, if you live in a flood zone. If you cannot afford flood insurance, do not purchase a home located in a flood zone.

Maintain close communication with your lender.Do not assume that “no news is good news” if you don’t hear from your lender or closing agent. Because lenders often ask for information at the last minute (i.e., insurance documents, current bank statements or pay stubs), contact your lender the day before and the day of closing to assure you bring all needed documents to the closing. You should also verify with your closing agent that he or she received all loan documents. Oftentimes, it is a case of one missing document, one verification or an email that has not been returned (or lost in a spam folder).

And, “it goes without saying,” yet we will say it: Buyers need to have all paperwork in order and present at closing, including a valid ID and most likely a cashier’s check for the down payment.

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IRS Warns of Tax Transcript Email Scam

ALTA TitleNews Online Archive
November 29, 2018

The Internal Revenue Service and Security Summit partners recently issued a warning about the surge of fraudulent emails impersonating the IRS and using tax transcripts as bait to entice users to open documents containing malware.

The scam is especially problematic for businesses whose employees might open the malware because the software can spread throughout the network and potentially take months to successfully remove.

Known as Emotet, this malware generally poses as specific banks and financial institutions in its effort to trick people into opening infected documents.

In the past few weeks, the scam masqueraded as the IRS, pretending to be from “IRS Online.” The scam email carries an attachment labeled “Tax Account Transcript” or something similar, and the subject line uses some variation of the phrase “tax transcript.”

These clues can change with each version of the malware. Scores of these malicious Emotet emails were forwarded to phishing@irs.gov.
recently.

The IRS reminds taxpayers it does not send unsolicited emails to the public, nor would it email a sensitive document such as a tax transcript, which is a summary of a tax return. The IRS urges taxpayers not to open the email or the attachment.

If using a personal computer, delete or forward the scam email to phishing@irs.gov.

If you see these using an employer’s computer, notify the company’s technology professionals.

Reprinted with permission from the American Land Title Association.

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Partners in Wire-Fraud Protection: The Escrow Account Holder and the Bank

Wire fraud is a HUGE problem that only keeps getting bigger and bigger.

In fact, U.S. Representative Randy Hultgren (R-III) wrote a letter to Fed Chairman Jerome Powell on June 29th urging the Fed to be more proactive in regard to wire fraud and real estate transactions. The letter referenced the United Kingdom’s system of matching payees’ names as a possible solution to the problem of wire fraud.

However, we don’t have to wait until a federal law is passed that orders banks to match the payee name on the wire transfer payment to name on the payee’s destination bank account (“Beneficiary Bank”).

As title and escrow agents, we can be proactive and in partnership with the banks with which we do business.

So, what can we do right now?

First, we can know what our Agreement with our Escrow Account Bank says.

Does your Bank Agreement say that your bank will check the payee’s name with the name on the destination account when a wire fund transfer is initiated?

Or, does it say your bank need only rely upon the account number it was provided in the wiring instructions order? The answers to these questions might lead to an opportunity to have a discussion with your partnering Receiving Bank.

We can also send the wire instructions on the payment order, with explicit directions that acceptance be restricted to match the designated payee’s name on the Beneficiary Bank account. If it doesn’t match, then do not send the funds.

Lastly, if something does go wrong despite our best efforts and precautions, then notify both the Beneficiary Bank and the Receiving Bank as soon as possible. Typically, banks require notification of an unauthorized transfer or error within a defined time period such as, for example, thirty or sixty days.

Aside from any contractual or legal requirement for early notification, the sooner the problem is communicated, the greater the odds of the bank being able to halt or pull back the wire funds transfer.

For a great explanation of how a wire fund transfer works behind the scenes, view “Funds Transfer Law and Unauthorized Payment Liability.”

tax scams

Watch Out for These 3 Tax Scams

According to the IRS, thousands of people have lost millions of dollars and their personal information to tax scams.

These days, when we consider fraud schemes targeting title agents, we usually think about email scams where criminals attempt to interject themselves into specific transactions for the purpose of diverting a wire.

Such scams can be devastating for agents and consumers, and we must guard against this type of email fraud.

However, scams involving real estate transactions are just one small piece of the larger fraud puzzle; and with tax season upon us, it’s important to remember that our industry is not immune to the types of email and other schemes that are common to other businesses.

According to the IRS, thousands of people have lost millions of dollars and their personal information to tax scams.

Scammers use the regular mail, telephone, or email to set up individuals, businesses, payroll and tax professionals.

The agency recently released a flurry of alerts warning of various schemes. You can find a full summary on the IRS webpage, but here are just a few highlights.

W-2 scam

The IRS warned that fraudsters are increasingly targeting payroll and human resource departments in an attempt to obtain their Forms W-2, which the criminals then use to file fraudulent tax returns.

To work the scam, the fraudster writes emails that look like they’re from an organization executive. The emails are directed to an internal employee with access to wage and tax information, and they often begin with an innocent greeting, such as: “hi, are you working today.”

Soon, the fraudster asks for all Form W-2 information.

The W-2 phishing scam has victimized hundreds of organizations and thousands of employees in recent years, the IRS said. Employers of all sizes have been affected including public schools, universities, hospitals, tribal governments and charities.

The IRS has established a process allowing businesses and payroll service providers to quickly report any data losses related to the W-2 scam.

Learn more about the process here.

Phone scam

In a recent blog post,”Think Email Fraud is the Only Hack Tactic? Think Again.” , we noted that scammers are increasingly using phone calls to attempt to trick title agents into wiring money to fraudulent accounts.

Some simple technologies even allow fraudsters to spoof phone numbers. So, a criminal could call you, but make it look like the call was coming from someone legitimately involved in the transaction.

As it turns out, tax fraudsters are using this same technology.

The IRS warned that criminals claiming to be IRS employees — using fake names and bogus IRS identification badge numbers — are trying to bully victims into sending them money.

Sometimes the fraudsters claim that the victim has a tax refund coming, and the money can be deposited if the victim provides his or her banking information.

The tax phone scam seems to be targeted toward individuals as opposed to businesses, but it underscores at least two important points: 1.) treat threats and high pressure language as a red flag; and 2.) the telephone isn’t always a “safe” method of communication.

Malware

Malware scams certainly aren’t new. Basically, the fraudster sends an email that looks like it’s from a trusted source, such as a business contact, a reputable company or a government agency.

The email directs the receiver to click a hyperlink or open an attachment.

When clicked, malicious software loads onto the victim’s computer, and the scammer uses that software to gain access to sensitive systems and information.

Fraudsters often attempt to trick title agents and others involved in real estate transactions into clicking malicious links by sending emails purporting to contain “important closing documents.”

By now many agents have seen the “closing documents” scheme, and they know how to avoid it. However, companies need to remain vigilant for other types of malware emails.

In recent weeks, the IRS has seen a surge in malware emails targeting the employees of all types of businesses. The emails, which appear to come from the IRS, carry malicious attachments labeled “Tax Account Transcript” or something similar. The words “tax transcript” often appear in the subject line.

The IRS reminded taxpayers that it does not send unsolicited emails to the public and would never email a sensitive document such as a tax transcript, which is a summary of a tax return.

If using a personal computer, such emails should be deleted or forwarded to phishing@irs.gov, the agency said. Those who receive such emails at work should notify their company’s technology team.

scam alert

Think Email Fraud is the Only Hack Tactic? Think Again.

Remember when wire fraud was just about bogus emails?

Criminals today have broadened their tools and tactics in their quest to divert escrow funds by tricking us and others in the real estate transaction into accepting falsified wiring instructions.

Email is no longer their only weapon. We’re hearing about two non-email tactics fraudsters are using.

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