When you buy a home, you’ll be faced with the choice to buy title insurance. If you have a mortgage, your lender will probably require you to purchase a Loan Policy but you’ll usually have the option to buy an Owner’s title policy as well. But that leads to some confusing questions which is why we created this guide.

What is the Difference Between Lender’s and Owner’s Title Insurance?

Lender’s Title Insurance is a policy that protects the lender from any claims on the title for the property you are purchasing.  Because the Lender owns the property until you’ve paid them back, it’s extra security for them.

Does Lender’s Insurance Protect Me?

No, it only protects the Lender as the financer of the property.  You will be required to buy the policy by most lenders as a requirement to borrow their money.

Owner’s Title Insurance is a policy that protects you in case someone tries to make a claim on the property you purchased.  The claim on your deed or “the document showing the property was transferred to you” [Read more…]

You’ve closed on your new home and gotten the keys. You’re now a property owner! Or are you? Even if you’ve had a clear title search, these sneaky hidden issues could affect the title, creating issues that keep you from selling or even affect your legal ownership altogether. They are rare but they do happen, and you should be aware that problems like these might come up even after your deed has been recorded.

1. Undisclosed But Recorded Party Wall

Row homes that were attached by a common wall, also called a party wall, were a very popular construction style in the early 19^th century. Each owner has an easement for their side of the wall and there’s usually a recorded covenant or declaration of the provisions covering the party wall which are attached to the title.

If changes are made to the home, for example combining units or removing the party wall but the recorded declaration still exists, it could cloud the title and cause headaches later on when you try to sell.

2. Deed Signed By Mistake

How could someone sign a deed by mistake? Well, if they didn’t know what they were signing or thought they were signing something entirely different and never meant to transfer their property, they could have a claim of non est factum (Latin for “not his/her deed”), which would [Read more…]

It’s time to close on your dream home, and you’ve just sent your down payment and closing fees to the escrow company to close. You sit down to finalize the deal and that’s when you’re hit with the news that the funds never arrived. Your money has been stolen by a sophisticated scam that tricks homebuyers into wiring money to a phony account where it’s whisked away overseas. This doesn’t have to happen to you.

With a few simple prevention measures, your settlement fees will arrive in escrow safe and sound. Here’s what you need to know to be a savvy homebuyer, protect your down payment from wire transfer scams, and what to do if you’ve been a victim.

Know How the Hacked Email Wire Transfer Scam Works

Knowledge is power and understanding the methods criminals use to trick people into sending them money is the first step to keeping your funds safe.

1. The scammers get access to the email account of a real estate or title agent, hacking the email or stealing the password using a phishing scheme. Now they can log in and read every email that’s being sent.
2. They monitor the emails looking for a victim who will be closing soon and is expecting to send money for settlement fees to the escrow account. Because they’ve been reading all of the correspondence, they know lots of details like what the transaction amount should be.
3. The scammers send a fake message to the homebuyer from the hacked email. They include bank account and routing numbers that go to their own bank account instead of the correct escrow account at the title company.
4. The homebuyer unknowingly wires the money for the closing fees into the wrong account. Wire transfers are instant and final, and often the money is not recoverable. The down payment is gone, and the homebuyer loses the house and often their entire life savings.

The trick to this scam working is that the email comes from the real account of the closing agent or real estate agent, and the criminals know exactly when to send a perfectly timed email with wire instructions.

Practical Tips to Protect Your Down Payment

Fortunately, keeping your money safe from wire transfer fraud is straightforward and just a few extra steps can prevent you from becoming a victim.

• Find out ahead of time how the closing agent will communicate sensitive financial information to you. They should call and talk to you, or use a password protected system.
• Never trust banking information sent by unencrypted email no matter who sends it. Bank accounts, credit card information, and Social Security numbers should never be emailed because it’s not secure. If someone sends you routing and bank account numbers this way, that’s a red flag.
• Always verify in person or by phone. You should speak to the title company or real estate agent and get the wire transfer information directly.
• Don’t click the phone number in the email, because sometimes scammers include their own phone number, and “verify” the transaction when you call. . Instead, look up the number on the company’s website or business card and dial the number yourself.

Wire A Day Before Closing

Don’t wait until the day of your closing to send the money to the title company. Sending your funds a day or two early helps avoid delays, and helps prevent last minute surprises at your closing.

Why a whole day early? Many banks only send wires out at a specific time, and sometimes they’re in a different time zone. You don’t want to miss the cut-off time or have your deposit arrive after the bank’s end-of-business, meaning the transaction won’t be sent or credited until the next day. Sending your transfer ahead of time also gives you a time cushion in case there’s a problem.

What To Do If You Are Scammed

If you are a victim of wire transfer fraud, there’s still a chance you can recover some of your funds. Immediately call your bank and see if they can recall the transaction. Call the bank you sent the money to as well. They may be able to freeze the account and keep your money from being transferred out of it. Let your title company know what happened so they can be on the lookout for similar schemes, and alert the party whose email was stolen so they can lock out the hackers.

Get the authorities involved, whether you’re able to recover your money or not. Wire fraud falls under the jurisdiction of the FBI, and you should call them or contact their Internet Crime Complaint Center to file a complaint. You should contact your local police department and file an official report. Call the FTC at 1-877-FTC-HELP and report what happened, so they can try to get it shut down and add it to their database.

Communication Is The Best Prevention

Having open communication with your closing agent goes a long way to help keep your transaction safe. You should be able to pick up the phone and talk to someone in person, and they should confirm with you that the money has arrived safely. Make sure you pick a title company you can trust to handle your closing.