Wire Instructions & Fraud
Hard to believe that something is potentially lurking around the corner when you are closing on a home. It is usually a happy time from both ends of the deal. However, with the changes to the Ohio Good Funds Law coming into play in April and more and more people are using wire transfers to exchange money; there comes the criminal element to trick you.
Precautions that Need to be Taken
For both Sellers and Buyers there are precautions that need to be taken as you head to the closing table. Number 1 issue is to be aware where you are sending/receiving your money. With the push for Wire Transfers as a secure way to transfer money, a more sophisticated con has developed. People who pose as the title company or Realtors have been sending emails to buyers and sellers to get their account information. People, trusting that these emails came from legitimate sources, have forward on to these people their information to find out later that it was all a fraud and their funds are gone.
How to Protect Yourself?
- Call your Realtor, Lender, Title Company, etc. to find out if the information you received is correct.
- Review the email address that it is coming from. If it has the correct name; but, an off email address to it, stop and ask questions.
- If it feels off; just, verify what is going on.
It is amazing how a little phone call to verify what is happening can save you from fraud. Trust but verify. Those should be the words any person who is transferring money should live by.
Ohio’s House Bill No. 463 goes into effect on April 6, 2017. This changes how title companies can accept Good Funds for Real Estate transactions. H.B. No. 463 is requiring funds in excess of $1,000 be in the form of a wire transfer. Wire transfers are different from ACH (a.k.a. Direct Deposits or Person to Person transactions).
- Wire Transfers are more costly.
- Wires are the most secure type of funds.
- Wire Transfers are also the quickest to transfer money.
I Am Paying What?
In interest of full disclosure, TRID (TILA-RESPA Integrated Disclosure) details ALL the costs into the closing document. Even costs the buyer is not paying for. This is confusing when someone at the closing table trying to make sense of the numbers.
I had one guy say; our contract states $200,000 so why am I seeing $204,899.31. Good question. We had asked for closing costs to be paid in the contract and what the loan amount and what he was bringing for a down payment added up correctly to the $200,000. (My only saving grace.)
Consumers want to see that they are paying what they agreed upon in the contract especially if other concessions were given like closing costs or there are other items the seller picks up.
It is hard enough to get to the closing table; but, when we have numbers that don’t add up to client’s expectations, it makes it difficult to explain. Luckily, the closing agent and I were able to put the client’s mind at ease; but, it was a tense moment. I’m not to sure if TRID really has made it simpler for the consumer.