Wire fraud is on the rise and it's best that all parties to a transaction must be diligent about falling victim to a fraudster's wire instructions. If you do, there is little that can be done to reverse the transaction.

Below is a true story that illustrates how wire fraud is perpetrated - read and be wary.

A Colorado couple recently lost their life savings – a $272,000 down payment – as a result of wire fraud. Now they are filing suit against the bank, the title company and the realtor alleging that none did enough to protect their financial information.

But whose fault is it, really? After all, it is the buyer who actually wires their money to the fraudsters.

Here's how the wire fraud process typically works:

1. A hacker obtains a realtor's transaction management/e-signature system login credentials by using a phishing email that looks like it’s from the transaction management system.

2. The user first types their credentials into the fake transaction management website, then are forwarded to the real one where their credentials work. They never even notice they’ve been phished. They just think they mistyped a password the first time.

3. The hacker logs into the transaction system to identify target transactions and collect information to fool participants.

4. If the agent uses the same credentials for both email and the transaction system, the hacker now has access to the agent’s email.

5. The hacker may set up an email-filtering rule so emails from the client “skip the inbox” and go right to the hacker.

6. Emails to clients can now be sent from the agent’s real email address.

7. In this case it’s not a spoofed email in which the email looks like it’s from the agent’s account but is actually from a different account.

8. Changing their email password may help, but at this point, the hacker only needs to spoof future emails—and unless the agent notices the filtering rule, the hacker still has access to those email conversations.

9. Because the hacker has information about the mortgage and title company from the transaction system, they can spoof an email from those parties, too.

10. When a client receives a spoofed email from multiple parties that confirm each other’s message, they’re more likely to trust each of those emails.

11. From that point, it’s a typical wire fraud scenario: At the appropriate time, the client is told to wire funds to an account the hacker has access to.

The consumer is the only one that can prevent wire fraud. You must confirm any wire or other disbursement instructions received by email with a phone call to your realtor or title company’s office. Do not call any phone numbers that are listed in an email. This could be a part of the scam.

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This was a guest post written by Kyle O’Connell who is an Account Executive for Coastal Title Agency in Freehold, NJ. Coastal has been in the title insurance business for over 30 years and services the commercial and residential markets. Although Coastal follows ALTA Best Practices to protect escrow funds, wire fraud can circumvent these protections. All parties to a transaction must diligent about not falling victim to a fraudulent wire scheme.

What is title insurance? Why do you need it? How do you get it?

Erin the Expert welcomes her first guest to MortgageCast, long-time friend and colleague, John DeSantis Jr.

John is a Licensed Title Producer since 1989 and Closer with All Ahead Title and has literally closed thousands of real estate transactions throughout the State of New Jersey in the past 30 years.

We get deep into the details about title insurance and how John works closely with his clients and their agents to deliver a great experience for all involved and help put homebuyers at ease.

Among other things, we talk about:

• Genealogy and heir hunting
• Buyer vs. Lender title policies
• Easement issues and claims
• The title process from beginning to end
• Settlement services and his personal touch
• How he works with his teams of Realtors, Lenders and Attorneys
• Why the client is the MVP

John's Bio

I hand hold clients and close real estate transactions effortlessly.

I started my career in Title Insurance long before I even knew it... My mom, Liz, was a title searcher and used to bring me into the Hall of Records when I was five years old (she says it was because no one could watch me during the day but I think it was just to help her pull books..no computers back then). What she didn't know back then was that she would later become my office manager!

My Uncle and mentor, Nick Beres (rest in peace Uncle Nick), was a title searcher, genealogist, title perfectionist (among many other talents) and took me under his wing when I was young. He had me coloring his many-layered Deed plottings before I hit 3rd grade. He took me all over the United States searching for heirs of New Jersey property owners to clear title. He taught me how to search titles (the right way). He served in the U.S. Navy and Merchant Marines and taught me how to run a business like a tight ship. He taught me honesty and integrity and for that, I couldn't thank him enough.

I founded Meridian Title Agency Inc. in 1989 with those same values and have helped thousands and thousands of homeowners purchase and refinance their homes and businesses. It was based on strong relationships, word of mouth referrals and doing the right things the right way. Quite simply, honesty, communication and trust are the foundation of any relationship and those values will never change. I chose to give up the administrative end of the business and found a new home at All Ahead Title as they have the same values I was brought up on and have an amazing team.

I am a guest lecturer at Brookdale Community College and Fairleigh Dickinson as well as lecturing for the Academy of Continuing Education for the Professions and the New Jersey Legal Training Academy and a proud member of Coastal LeTip of Colts Neck.

Renovation Loans are a great way to purchase (or refinance) a home in need of repairs and roll the cost of those repairs into your mortgage payment. The process and documentation for these types of loans are slightly different. Watch Erin the Expert's latest video to find out if a Renovation Loan is right for you!

Check out the other videos in the series:

• Financing Your Closing Costs
• 5 Steps to Qualification
• Benefits of a Boutique Lender
• Erin the Expert | Q&A

Want to set some time to speak with Erin directly? Click here. If there's anyone that can get a deal done it's Erin the Expert. #ETE

And if you like podcasts, check out Erin's MortgageCast too. She keeps it short and cuts right to the meat of each topic.

Should you "lock in" or "float" the interest rate?

All loans are locked in at some point prior to closing, but should you do it earlier or later? Consider the following points to help you decide.

Locking In sets or “locks” the interest rate of your loan for a specific number of days. Typical locks run in 15 day increments up to 60 or 90 days. Once set, it's important for your loan to close within that period, and hence, locking is safe only if you're sure of the closing date.

Floating is the opposite of locking in and simply means your rate is not yet set. It's "floating" with the market. If rates are moving down, you can benefit. If rates are moving up, your rate will, too.

Which is best? Unfortunately, "best" can be defined only after the fact. If you float your rate until the last moment and rates fall, you win. If rates rise unexpectedly, you have a higher rate and payment. No one knows for sure which way rates will go. Often, "best" is better determined by your peace of mind. If you will sleep better at night by locking, go ahead. If you're comfortable with some strategic risk and think rates will fall, then float.

Still undecided? It may help to realize that very few people ever lock at the perfect time. The market is always moving, and there are just too many influences that cannot be predicted. It's also good to know that once your loan has closed, it's usually easy to refinance if rates end up moving lower. If rates rise, then you can be comfortable in knowing you secured your rate at the right time.

Bottom line: The difference in rates from offer to close is usually pretty small. Since none of us can predict the future, simply do what will give you the least stress during this process.

Whatever your decision, reach out, and we'll be happy to help.