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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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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

LifeDoor automatically closes doors to save homes and lives

(TECH NEWS) LifeDoor is one of the smartest devices we’ve seen in ages and could save peoples’ lives and protect their homes.

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The way that we build our homes, with synthetic materials, furniture, and cheaper construction is making our homes more flammable – House fires spread 600% faster today than 40 years ago, according to the National Institute of Standards and Technology. This means that every second counts.

And while most us have some warning system: smoke detectors, and maybe even fire suppression systems built into our homes, there is a very easy way to help slow the spread of fire in your home: closing your door.

Research by the UL Fire Safety Research Institute concluded that closed doors do a number of things including:

  • A closed door can help keep back heat and prevent rooms reaching dangerous temperatures.
  • A closed door keeps more oxygen away from the fire so it allows you to breathe better.
  • Closing the bedroom door at night gives you more time to react to a smoke alarm.
  • Closed doors keep dangerous smoke away from you – smoke and toxic gasses can incapacitate you and keep you from escaping the fire.
  • Closing door cuts fire off from a fuel source and can better contain the fire.

And of course, where there is an opportunity, our internet of things has a solution.

In case you don’t automatically shut your doors (perhaps you’re a free spirit, a Gemini? Who knows?) There is a gadget for that. Lifedoor is a gadget that integrates with existing smoke detectors and does three things: it closes the door of the room, illuminates the room to help the occupant make a better decisions, and sounds a secondary alarm that can help wake your more heavier sleepers.

The product easily installs onto the hinge of a door and then attaches to the door with screws or even double sided tape. It activates when it hears the tone of the triggered smoke alarm (which is standardized at 85 decibels, #FunFacts).

For those of you who may fear the worst – this does not render the door unopenable and the battery should last 18-24 months depending on use. The product is currently in pre-order and is set to ship in the fall. (if you’re interested, there is a promo code floating around).

One particular note about this new product is that its support has largely come from firefighters – and those guys know their stuff.

Hopefully, you won’t have to experience a housefire. But even if you don’t invest in LifeDoor – remember that closing your own door can keep you safe by giving you more time. And nothing is more important than being prepared: make sure you follow the best home fire practices you can – learn more from the American Red Cross.

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Homeownership

How the foreclosure crisis still dictates many American’s lives post-recession

(REAL ESTATE) A decade after the Great Recession began, the foreclosures of many Americans still rocks the housing market – and beyond. 


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Foreclosure. The word alone can shake any struggling homeowner. And a decade after the Great Recession began, foreclosures continue to burden U.S. families, stifling economic growth, and leaving uncertainty about how those struggling the most will make it through the next crisis.

Sure, the nation’s unemployment rate holds steady at a pre-recession low of 4.4 percent and there are more jobs in the market today. However, for some Americans, the recession and its costs have been significant and seemingly never-ending. From job losses to home losses and everything in between, many are wondering when they will be able to get back on their feet.

According to Alana Semuels of The Atlantic, if the U.S. is to weather another economic crisis, understanding why recession recovery has been so tough for some families is crucial. If not, losses could be even more devastating next time around.

So what’s the deal?

On a macro level, economic conditions seem brighter, but it’s only when you dig into the nitty gritty data that the struggles reveal themselves. For example, the labor-force participation rate (which measures the ratio of adults who either have jobs or are actively seeking one), fell sharply during the recession and remains at 62 percent, according to Bureau of Labor statistics.

Additionally, Census data shows lower-income tier families have experienced an average annual income decline of more than $500 between 2006 and 2016, while the top 20 percent of Americans experienced average income growth surpassing $13,000. That’s dramatic difference.

And then there’s the housing market.

While the population has grown significantly, there are now 400,000 fewer homeowners. Before the recession, the homeownership rate was 69 percent and today it’s 63 percent, per the Federal Reserve. That seemingly minute 6 percent drop actually represents millions of families who have lost their homes and livelihoods in the past 10 years.

Money disappeared, credit scores were ruined, and many are still trying to rebuild. Approximately 9 million families lost their homes to foreclosure between 2006 and 2014 in addition to their financial stability.

The recession created an unstable job market and many families just focused on making ends meet instead of moving up the career ladder or accumulating wealth. As a result, they fell to the bottom of the economic ladder, as Semuels put it, and are still trying to climb back up.

The foreclosure crisis was also focused on individuals who were already vulnerable, hitting Latino and black families the hardest. Many such families were first-time homeowners who really wanted a home but lacked access to traditional financial products. On top of less savings, education and wealth connections, foreclosures have really set these families back.

The detrimental effects of foreclosures spiral into other aspects of life, too. Researchers have found families in foreclosure visit emergency rooms more often, their mental health declines, and children struggle in school, to name a few.

Foreclosure often means leaving a community and the connections in that area that could otherwise be used to find jobs or get financial assistance, too.

For these reasons, many families are still struggling today, and their plight continues to be controlled by the economy. Millennials who have entered the workforce post-recession have made historically proportionately lower wages than previous generations and, as a result, have not been able to save as much money. In fact, anyone who lost their job during the recession (about 8 million people) lost substantial financial footing.

To this point, it’s not surprising that first-time homeowner rates are suppressed, as the National Association of Realtors 2017 Profile of Home Buyers and Sellers found. Fewer homebuyers has led to fewer homes built, a situation that has slowed economic growth a decade post-recession.

If the pace of homebuilding had returned to a more normal level, there would’ve been $300 billion more in the U.S. economy last year, boosting GDP by 1.8 percent, according to Ken Rosen, chair of the Fisher Center for Real Estate and Urban Economics at Berkeley.

“The failure of the housing sector to recover is the main reason we have subpar economic growth,” Rosen told The Atlantic.

Many Americans do not feel financially secure right now.

Some are still just trying to find stable housing options.

And until they are able to raise their standard of living, it remains uncertain how the families who suffered the most during the Great Recession will weather the next (inevitable) economic downturn.

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Homeownership

What can you expect with property values in 2018?

(REAL ESTATE NEWS) Although property values fluctuate depending on location, we can spot regional trends to showcase what 2018 has in store.

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MID mortgage interest deductions existing home sales

One question property owners and potential buyers are constantly asking as 2017 winds down is: What can I expect with my property values for the next year? While there may be no crystal ball for property values, there are certainly trends that can be helpful in making decisions in the New Year.

According to data analysis on property value trends from the National Association of Realtors (NAR) using federal American Community Survey (ACS) numbers, good things are in store for property owners and hypothetical buyers.

“Using data from the American Community Survey (ACS), we can analyze the gains and losses of property values over time,” Michael Hyman, research data specialist for NAR said. “Looking at the 2005 – 2016 period, the figures point to trends, which vary by region and state.”

Using data from the ACS from years 2005 to 2016, NAR found only a few states for this 11-year period are showing property value stagnation or devaluation. More specifically, property value growth was the strongest in the Southern region. The Northeast had the weakest growth in property values.

NAR’s regional analysis of the of Northeast, Midwest, South, and West goes further in the weeds to describe what types of value trends are occurring. The South’s lead on property value growth is lead by Louisiana, with a ratio of 57 percent price growth with four percent average annual price growth. This finding falls in lockstep with the idea that many property flippers that are now turning their attention to Louisiana (specifically Baton Rouge).

In contrast to the South, the Northeast (which normally has the slowest price growth) had one of the biggest losers in terms of price trends, with Rhode Island’s value dropping 11 percent, and negative one percent change annually. If your eye is on the Northeast at any cost, Pennsylvania is your best bet, with a 40 percent price growth and 3 percent annual growth.

But the big winner in the property growth trends? The Midwest’s North Dakota, with a whopping 106 percent increase in price growth and 6 percent growth annually. The big loser for this time frame is Nevada, with negative 16 percent growth and a decrease of one percent annually.

While this data can’t guarantee that any current or future property venture will turn profitable, it can highlight some areas of interest. It’s no crystal ball, but it can give you a great perspective on future property value forecasting.

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