Wire fraud protocol that actually works.
The protocol is not complicated. It fails because it gets skipped on the one file where everyone is in a hurry.
Real estate wire fraud follows a simple shape. Someone gains visibility into a transaction, waits until funds are about to move, and sends payment instructions that look exactly like the ones everyone expects. By the time anyone notices, the money is gone through several accounts.
Nearly every successful attempt depends on one thing: somebody accepting instructions without verifying them by voice on a number they already had.
The rules that hold up
- Verify by callback, always, using a number you already have. Not a number in the email. Not a number on the document attached to the email. A number from your own records or from a directory you trust.
- Treat changed instructions as fraud until proven otherwise. Wiring instructions do not change mid transaction. When they appear to, that is the event, and it deserves a phone call before anything else happens.
- Never send instructions or confirm details over email alone. Email is where this begins.
- Slow down when there is urgency. Manufactured time pressure is part of the method. A closing that suddenly must fund in the next hour is a reason to verify, not a reason to skip verification.
Tell the borrower before they need to know
Warn them at application, in writing, and again before closing. Tell them plainly that instructions will not change, that they should call a known number before sending anything, and that no one will ever ask them to move funds urgently by email.
A borrower who has heard that twice is dramatically harder to defraud than one hearing it for the first time at the table.
If a wire goes out wrong
Speed is the only thing that helps. The first hours matter more than anything that happens afterward.
- Call the sending bank immediately and ask for a recall
- Report it to the FBI's Internet Crime Complaint Center
- Notify local law enforcement
- Notify the title company and everyone else in the transaction, since the same attempt may be aimed at another party
One thing to be clear about with borrowers: the closing protection letter is protection against the settlement agent's conduct. It is not a safety net for a borrower who sends their own funds to a fraudulent account. That loss usually stays where it lands, which is why the prevention conversation matters more than the recovery conversation.
Every file is different, and underwriters can view the same facts differently depending on the details. Always consult your escrow officer, who can take the specifics to the underwriter. Title and Lender requirements are also separate, so clearing one does not mean you have cleared the other.