Wire and Title Fraud in Real Estate Transactions: Implications, Avoiding Liability, Mitigating Risks, Recent Cases

Description

Real estate wire and title fraud continues to be a growing threat due to technological advancements and sophisticated social engineering, including AI. Parties to transactions, including attorneys, lenders, title companies, buyers, and sellers, must understand the risks and potential liabilities when fraud occurs.

Wire fraud schemes are typically carried out via email when a buyer or investor receives fake wire instructions that appear to be from a title company, construction company, attorney, or real estate agent. The scammer then directs the funds to their own account.

Title fraud, also known as deed theft, is relatively rare but is becoming a greater problem. In a title fraud scheme, a fraudster illegally transfers the ownership or title of a property to themselves or another party often by a quit claim deed without the owner's knowledge or consent. The fraudster accomplishes the deed transfer usually by forged documents and fake identification.

The increased prevalence of these fraud schemes has led to a growing number of cases being brought against the parties to a transaction. Real estate professionals, lenders, attorneys, and title companies may face legal liability for failing to prevent or detect fraudulent wire or title transfers, particularly if they had control over the transaction or communication. Thus, it is increasingly important that parties involved in real estate transactions undertake precautions to prevent significant harm. 

Listen as our authoritative panel examines the current wire and title fraud risks in real estate transactions and provides guidance for safeguarding transactions and avoiding liability.