Housing Scams to Watch Out for in the Pandemic

To say the global pandemic has upended everything is a bit of an understatement. When the coronavirus first arrived in the United States at the beginning of the year, everything came to a screeching and harrowing halt. In an effort to decrease its rapid spread, anything that could go virtual did. Schools, businesses, even real estate. Months later, most of these sectors still continue to operate fully, if not partially, remote.

While the first few months of this year have been incredibly trying, industries lucky enough to adjust to a new virtual landscape have been afforded a convenience unlike ever before. Yet, with this newfound flexibility comes new risk.

Even before the pandemic, the FBI estimated that over 11,000 people were victims of online real estate scams, which was a pretty significant jump from the previous year. Now that real estate is even more digitized, these numbers will likely continue to rise. As virtual communication and transactions become the new ‘norm,’ it creates the perfect breeding ground for scammers and hackers.

Highlighted below are some of the biggest scams that real estate agents and homebuyers should watch out for to ensure they aren’t victimized by cybercriminals looking to take advantage.

Be careful who you send money to

COVID-19 has completely altered the entire homebuying process. Some real estate agents are closing deals without ever meeting their clients in person. Virtual home tours, Zoom meetings, and digital signings have made this a more seamless process, but it’s the payment process that makes homebuyers the most susceptible to scams.

One Silicon Valley-based real estate agent recently shared an experience that happened with one of his clients with The Mercury News. A cybercriminal managed to hack emails between the agent and his client and took on the identity of the agent, threatening the client and demanding a wire transfer be made immediately despite her hesitancy. She complied and ended up losing $2,000 to the scammer. Fortunately, her story has a happy ending: the FBI was able to track down the criminal and return her money. However, not all homebuyers are so lucky. And stories like these are everywhere.

Foreclosure fraud

Some banks are allowing homeowners to defer or skip their mortgage payments for the first six months, with the accrued interest being added to the principal amount that’s owed. Problems arise when the six-month mark hits and these individuals still don’t have stable income in order to pay off the accrued amount. As a result, they go into debt. And this is where scammers strike.

Cybercriminals will jump at the opportunity to offer these homeowners non-traditional financing options. By getting them to sign additional mortgages or a builder’s legal hypothec, these scammers are able to get their name on the title of the house. They can then initiate a loan default, and if the buyer is unable to pay, they will be forced to sell their property.

With the ongoing pandemic, scammers and hackers are getting more creative than ever before. Being aware of potential risks is important for your own protection, but you can also use MyLife.com to take your safety to the next level. Our platform allows consumers to confirm the identity of every person they interact with online. We provide verified Reputation Profiles that include Reputation Scores on over 320 million Americans. These profiles can include any criminal and civil court records, and reviews written by people who know them. Even if someone seems trustworthy, it’s still advantageous to double-check that they are who they say they are.