Wire and Title Fraud in Real Estate Transactions: Implications, Avoiding Liability, Mitigating Risks, Recent Cases

Real estate wire and title fraud continues to be a growing threat due to technological advancements and sophisticated social engineering, including AI. Parties to transactions, including attorneys, lenders, title companies, buyers, and sellers, must understand the risks and potential liabilities when fraud occurs.

Wire fraud schemes are typically carried out via email when a buyer or investor receives fake wire instructions that appear to be from a title company, construction company, attorney, or real estate agent. The scammer then directs the funds to their own account.

Title fraud, also known as deed theft, is relatively rare but is becoming a greater problem. In a title fraud scheme, a fraudster illegally transfers the ownership or title of a property to themselves or another party often by a quit claim deed without the owner's knowledge or consent. The fraudster accomplishes the deed transfer usually by forged documents and fake identification.

The increased prevalence of these fraud schemes has led to a growing number of cases being brought against the parties to a transaction. Real estate professionals, lenders, attorneys, and title companies may face legal liability for failing to prevent or detect fraudulent wire or title transfers, particularly if they had control over the transaction or communication. Thus, it is increasingly important that parties involved in real estate transactions undertake precautions to prevent significant harm. 

Listen as our authoritative panel examines the current wire and title fraud risks in real estate transactions and provides guidance for safeguarding transactions and avoiding liability. 

I. Overview: the growing risks of title and wire fraud in the real estate industry

II. Types of wire fraud in real estate

III. Understanding title fraud

IV. Examining the risks, implications, and liabilities from wire and title fraud

V. Strategies for safeguarding transactions from fraud

VI. Lessons from recent fraud cases regarding the duties and potential liability of parties to real estate transactions

VII. Practitioner pointers and key takeaways

The panel will discuss these and other key issues:

• What are the current risks associated with title and wire fraud in the real estate industry?
• How can real estate counsel protect themselves and their clients against title and wire fraud?
• What lessons can be learned from recent wire fraud cases regarding potential liability for parties involved in real estate transactions?
• What steps can real estate professionals, title companies, lenders, and attorneys take to mitigate the risks of liability and losses for fraud in their transactions?