Maine's Newest Tool To Protect Homeowners From Fraud

Apr 8, 2019

Homebuyers can find themselves the targets of fraud, including home improvement and roofing scams or others carried out through the internet and email.

The Maine Bureau of Consumer Credit Protection released the New Homeowners' Anti-Scam Advisor, which offers consumers some tools to avoid these traps.  The booklet is available online or in printed form for Maine residents who call 1-800-332-8529.

 

Bureau of Consumer Credit Protection Principal Examiner David Leach is the primary author of the New Homeowner Anti-Scam Advisor. He spoke with Maine Public's Ed Morin, and he says the newest and potentially most costly scam is known as the Downpayment Wire Fraud Scam:

Leach: What happens is someone is in the tail end of their mortgage application process they're a day or two away from closing, and all of a sudden a mysterious email comes in asking them to change the direction of their down payment money from the bank they thought it was going to to another bank. And the scammers are very slick. They spoof or have a close to looking email from either a lender or a title company or they may even hijack that email. And so the consumer, you know, it could be a first time home buyer or a veteran, they say wow I guess I better follow that , so I'll wire it to the new location. And of course the money is gone. So when you think about, Ed, when you think about a quarter of a million dollar mortgage, $250,000 mortgage and a 20 percent down payment that's $50,000. $50,000.

The reason why I wrote this book is to make people situationally aware that - don't do that at the last minute! Contact your lender. Contact the title company. Don't do it! And even better, bring a cashier's check, you know, to closing, representing the down payment. That way it can't get hacked.

Morin: You make me think that looking back on the first mortgage that we signed, though lo those many years ago, everybody was in one room there were reams of paper to read. But things really have changed. How would new homebuyers find things different than they were those many years ago?

Before I wrote one word of this book I sat down with a banker from Augusta, Maine who's been in the mortgage lending industry for over a quarter century. I said 'So how are things changed,' just like way you said to me. He said, 'Oh David a lot of it's electronic now.' The parties don't go to the title office they don't come to the bank here. Everything is electronic. And here with this, you know, this wire fraud happens. And I said 'what do you recommend?' He said 'old school,' he says go to the closing, bring a cashier's check, a bank check,you know, two party bank check to the closing. There's no way it can be hacked. Double, triple check everything, have a lawyer look at the closing documents. And that really prevents a lot.

If you think you have been scammed, what do you do to find out and take care of it?

If you've actually committed the act of wiring the money to a different routing and transit number and bank account number, you know, sometimes it immediately is almost too late. You want to notify your bank. You want to notify your lender. You want to notify the title company, the mortgage lender, could be a bank savings bank, credit union, mortgage company, whatever. They need to talk to the FBI immediately. If you wait too long, the money is gone. So ASAP, the big news is press pause, don't do it. Call your lender. Call the title company immediately and they will likely say this is a scam.

And you've called this the 'new homebuyers adviser.' Why?

Well it's, in two ways. One, what we've just talked about, is the people that are going through the closing process, and, you know, some of the scams like, you know, they paid all their fees but these emails come in 'we need a few extra dollars for this, a few extra dollars for that.' It's not coming from the bank.

But it's also the new the new homeowner, someone that's been in their house for just a few years. And there is a knock on the door and maybe they do need a new roof, but it's a it's a scam roof company, a fly-by-night or they've got a dirt driveway, and, you know, it's spring in Maine now, and somebody comes up and says 'hey you know I've got a little asphalt left over, I can pave it for a couple of hundred then we'll come back the next day and finish it.' And then, you know, either they don't come back, or what they finish is super super high.

And so there's a lot of good there's a lot of good information in there. I mean even utility scams, you know, utility scams: people knock on the door say 'hey I want to do an energy audit for your house, a free one. Can we take a look?' One person's keeping the homeowner busy, the other one is is taking, you know, jewelry and other stuff out.

So, I mean this book is very all encompassing, we think. And of course it's free, you know, from the state of Maine. So it's really for everybody. It could be the 18, 19, 20-year old in their first home, it could be somebody that's on their second or third purchase, and things change and, you know, we have we have these emerging issues now. And we at the state of Maine like to stay ahead of this, and so that's where we're at with this booklet.

Originally published April 5, 2019 at 6:29 p.m. ET.