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Couple sues real estate agent, title co, bank over wire fraud #WatchOut

(HOMEOWNERSHIP) Wire fraud in the digital age: it happens. Is there anything that can be done about it or is everyone vulnerable?

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bonds and mortgages

A simple wire transfer

It should have been a dream come true for James and Candace Butcher. They’d chosen the house they wanted to retire in, negotiated the price, and sold their home for a down payment.

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All that was left was the last wire transfer – $272,000.

The next day, they were bankrupt.

Too good to be true

Like many older adults, the Butchers entered the real estate market with family in mind. They wanted to live closer to their son, and to have a place big enough for grandchildren to enjoy.

“We were truly excited, when through negotiations, we won the bid,” Candace Butcher said. “Through the entire process, I kept saying, ‘I can’t believe this is going to be our house.”

All it took to rob them was a simple confluence: wire fraud and poor security precautions. The email that provided the Butchers with wire transfer details was sent from the proper domains for the Butchers’ pay agreement, under the proper names.

The only problem, according to the complaint and the Butchers’ attorney, was that those domains had been hacked.

Someone had gotten inside Land Title Guarantee Co. and Envoy Mortgage and used their contact information to obtain a fraudulent wire transfer.

The secret behind the hack

It’s a frighteningly simple trick: all it takes is the password to the right email account. The exact dollar amount had yet to be specified, and the Butchers had no reason to think an email from their mortgage company would be anything but legitimate. They’re currently suing both companies for insufficient security.

They’re also suing Wells Fargo, the bank handling the transfer. According to the complaint, Wells Fargo failed to acknowledge the fraud and neglected to make recourse available, including a 72-hour freeze that would have saved the couple’s savings.

Instead, while the problem is being resolved, the Butchers are living in their son’s basement.

The details of the whole sad saga can be found here, but the takeaway is simple: security is everything. Everyone cares about housing. Not everyone is an expert in data security. The real estate industry has a moral and professional responsibility to guarantee secure transactions.

Better safe than sorry

Real estate customers can avoid tragedies likes the Butchers’ by taking precautions on their end.

The National Association of Realtors provides guidelines for both. They should be required reading for anyone in real estate, but by way of a simple version:

If you’re a real estate professional, be aware of the possibility of fraud. Build warnings into your client communication structure. Better yet, educate your clients about common types of scams and what to do about them.

Better than better, designate or hire a staff member who is specifically responsible for the process, keeping lines of communication open to guarantee this never happens to you.

Don’t reuse passwords.

Don’t repeat passwords.

Clean out your email to secure sensitive information.

Instruct clients double-check everything. What happened to the Butchers started because they trusted an unverified email.

Don’t do that, ever.

When you receive instructions via email, confirm them by phone or in person, and at the risk of stating the obvious, don’t use any of the contact info in the email. Some very committed hackers will even put up legitimate looking websites. Call someone you’ve already spoken with in person, or for that matter, drop by.

New startup solves this problem

You can do all of those things and still feel insecure about the process. But we’ve uncovered a brand new real estate tech startup that is dedicated to solving this problem.

BuyerDocs can help prevent wire fraud cases like this with its simple, free, easy-to-use solution. Our service can save home buyers from losing their down payments to a scam, while also helping protect title companies from potential lawsuits,” Abigail White, Cofounder & CMO

Because the startup is brand new, it’s not yet the industry standard, but it truly should be.

Send a link to your title company and ask why they’re not using BuyerDocs to protect your clients.

Finally, trust your instincts and teach your clients to do the same. If something about the transaction feels wrong, go with that feeling and confirm.

The Butchers are working with attorneys and the FBI to resolve their fraud claim. This is how you keep from having to do the same.

#fraudsucks

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Homeownership

Bank of America helps income-restricted homebuyers with $5B program

(HOMEOWNERSHIP) Bank of America is offering assistance to low to moderate-income homebuyers by reducing their mortgage and upfront home-buying costs.

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Front of Bank of America location

The Bank of America announced that it is expanding its affordable homeownership initiative to help low to moderate-income homebuyers find their dream home. The Bank of America Community Homeownership Commitment® started in 2019 with $5 billion.

According to the press release, the program has already helped almost 21,000 individuals and families purchase homes by helping with down payments and closing costs through grants. When combined with other programs designed to help first-time homebuyers, the upfront costs of owning a home are significantly reduced. This information is beneficial for Realtors working with first-time or low to moderate-income homebuyers and can help provide more options for this clientele.

Bank of America’s grant programs

Bank of America features two grant programs to help homebuyers. Grants do not require repayment, giving homebuyers with lower incomes a foot in the door.

Down Payment grants – eligible homebuyers can receive 3% of the home’s purchase price up to $10,000 (whichever is less) toward the purchase of their home.
America’s Home Grant® program – credit towards closing costs of up to $7500 or to buy down the interest rate.

According to Bank of America, these two grant programs can be used together. The average homebuyer receives about $14,000 toward their home purchase, but some can receive up to $17,500 towards their dream home.

Homeownership is the American dream

Maya Angelou said, “The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.” Homeownership doesn’t just benefit families, it benefits communities. Bank of America isn’t the first financial institution to offer programs to help homebuyers with down payments and closing costs.

The housing market might be competitive right now, but homebuyers can still find houses where they can set down roots. It pays to look around for options to help low- to moderate-income shoppers find resources that assist them in reducing their mortgage and homebuying costs.

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Homeownership

Supply chain shortages Realtors need to know about to help their clientele

(HOMEOWNERSHIP) The supply chain shortage hasn’t just affected cars, computer chips, and medical equipment – what home goods are scarce and for how long?

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Down one aisle of a large warehouse.

Most experts are predicting that supply chain shortages won’t end anytime soon. What started with a rush on toilet paper at the beginning of the pandemic has become a supply chain nightmare across multiple industries, including homes themselves, new cars, computer chips, and medical equipment. While there are many reasons the supply chain has been disrupted, the fact remains that it has been pushed to the brink and homeowners may be impacted as they purchase a house or invest in remodeling to sell their home. This is also important information for Realtors to have a grasp on in order to better help their clientele during the home buying process. Without an end in sight, here are some goods that might be scarce next year:

Paint

CNN Business reported in September that the demand for paint is strong, but the industry has seen raw material cost increases. Between Hurricane Ida and the winter cold snap in Texas earlier this year, suppliers have not recovered to their pre-storm operating levels. One solution is to buy leftover paint or use wallpaper to update a room.

Appliances

According to Consumer Reports, the wait for some appliances is 4-8 weeks, with luxury appliances taking up to 4 months. Homeowners may need to compromise on the model they really want or buy a used model. If repairs can make the appliance run for a few more months, order a new one and hope for the best.

Furniture

Large ticket items have been impacted by shipping delays from Asia – Furniture is on that list. Homeowners may want to order furniture now for redesigning in 2022. Another alternative? Buy previously owned pieces or talk to local artisans who reupholster and repair furniture.

Bottled Water

It’s not the water that’s in shortage, it’s the plastic products used to bottle the water that is causing the supply chain to be disrupted. This could be a good thing for the environment. Suggest homeowners turn to water filtration systems, from an in-home installation to a pitcher you put in the fridge.

Power Tools

The freight industry is experiencing multiple issues, which is adding to the supply chain problems in the US. Power tools may be in short supply over the next few months. Fortunately, there’s an easy solution. Borrow from a neighbor, just make sure to return it quickly. Rent tools from your local big-box hardware store.

Don’t let the supply chain disruption put home projects on hold. Revamp your ideas. Compromise on materials, maybe a different pattern or color than planned. Or find creative solutions to keep moving forward.

Large cargo ship with many multi-colored bins representing the supply chain.

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Homeownership

Side hustle your home: Offer up your humble abode for film and TV shows

(HOMEOWNERSHIP) Are you interested in a side hustle and willing to offer up your humble abode to be part of the magic of filmmaking? We give you the details!

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As a reader of AG for Real Estate, we know you may be a real estate practitioner, but you’re also a likely homeowner (or have endless clientele that could benefit from the following information, so enjoy)!

In this housing market, no matter what you’re looking for – be it a studio style tiny home or a 13-bed mansion with a guest house – you’re going to pay top dollar. That was the case for Mary Kay Seery (not to be confused with the MLM) and her husband, Billy Seery, when they moved from the prominent East Village in New York City to a Victorian style home in Brooklyn.

Their friends heavily questioned the decision, but with Mary being a life-long real-estate broker, she knew the underestimated value – especially when it came to staging it for use in movies or television shows as a side hustle. Their home has starred in Girls on HBO, Mysteries of Laura on NBC, The Affair Season 3 on Showtime, and many more.

“I’m sure we’ve made over $500,000 so far.” The home was purchased for $490,000.

“While state film commissions have increasingly brokered relationships between property owners and filmmakers and location agencies will shop your property for a fee, many – if not most – production companies do it the old-fashioned way. You don’t find them. They find you.”

For example, an anonymous flyer was dropped into the mail slot of a Chicago home in June 2019. The owners, Rian Akey and Shaun Kane, responded immediately to the scout, but did not hear back for filming until September that same year. Turns out, the crew wanted to transform the living room of their 1885 Queen Anne home into the Smutny Funeral Home for the FX crime drama Fargo Season 4.

Once agreed, the crew quickly transformed the heart of their home, adding tobacco-stained wallpaper, a swinging entrance door, folding chairs and flower stands, and last but not least…the casket.

“We had a coffin in our living room for almost a year.”

Due to NDAs, which are standard between homeowners and the location manager, Kane and Akey could not disclose the payment they received for the whole 11-month ordeal. What we do know is that the upfront cost for using the location is relative to labor union fees, production size, the renovation before and after, and how long the shoot will last.

Other stories follow suit all over the US. Carroll Belser, who resides in Sunnyside Plantation in Edisto Island, SC has seen her inherited 1875 family home transform for The Notebook, L.L. Bean photoshoots, Short Term Rental TV Pilot, and more. In Prospect Park South, New York City, Ms. McFeely has allowed her home to be the filming location for A Price Above Rubies, Half Nelson, The Groomsman, and The Great Gilly Hopkins.

Homeowners do warn that there can be mishaps during the filming process. Floors tend to become heavily worn from foot traffic, the crew may want to shoot in a room not originally specified, or filming could get extended for a longer period of time than originally agreed.

However, Ms. Seery says that the follow-up repairs usually whip things right back into shape, but to “make sure you have a good relationship with the location manager,” and to ask for extra payment if necessary.

Still interested in the side hustle and willing to offer up your humble abode to be part of the magic of filmmaking? Contact your local government’s film and TV office to register your home as production-friendly. You can also use online databases to list your home similar to Airbnb, like LocationsHub, Reel to Reel locations, or Set Scouter. You may also just get lucky and have a location scout reach out to with interest in using your home.

All of that to say, using your home for movies or television can be “lucrative, but also disruptive.” Be prepared to renovate your floors, be put up in a hotel, and for film fans to take photos on your front porch for years to follow. Lastly, you should be able to watch the film or show back to see someone “die” in the corner of your living room or take a pregnancy test in your bathroom.

If you can handle all of that, let the cast, crew, and CASH roll in!

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