Beware of possible malware attack

Several real estate agents and lenders who work with Federal Title recently received an email purporting to be from a Federal Title employee with the same name as a local real estate professional and with a file attachment for download. The email is a scam, and we implore you to delete the email immediately.

If you ever have questions or concerns about an email you received from Federal Title, please do not hesitate to contact us to verify its authenticity. Also, know that we will never ask for or provide personal / financial information through unsecure channels.

Our technology team suspects the email sent last Thursday at approximately 6 pm was a malware attack. Malware is software that’s intended to damage or disable computers and computer systems.

A malware program might log keystrokes of a user to obtain sensitive login information. Malware can create a computer zombie, allowing a hacker to use that computer to conduct other malicious attacks usually without the owner’s knowledge. An estimated 50 to 80 percent of spam sent worldwide is attributable to zombie computers.

This is not the first time a hacker has impersonated a title company, real estate professional – even a consumer – in an attempt to install dangerous malware or gain access to sensitive information. We want our clients to be aware of another common scam we have observed, one that attempts to steal the consumer’s down payment funds via a fraudulent wire transfer. This kind of attack is unfortunately becoming commonplace, and once the funds have been wired to the scammer’s account they are gone.

The Federal Trade Commission posted a bulletin that explains how scammers phish for mortgage closing costs. They offer a few ideas to help real estate professionals and their clients avoid phishing scams.

  • Don’t email financial information. It’s not secure.
  • If you’re giving your financial information on the web, make sure the site is secure. Look for a URL that begins with https (the "s" stands for secure). And, instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the web address yourself.
  • Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security.
  • Keep your operating system, browser, and security software up to date

We also want to remind you that Federal Title takes Internet security very seriously. We use military-grade email encryption technology and adhere to the American Land Title Association’s Best Practices for the proper handling of each and every individual’s non-public personal information, i.e., social security and bank account numbers.

Unfortunately we anticipate malware and phishing scams will remain a threat to our industry for the foreseeable future. The best way to defend against such attacks is to be skeptical of any email that contains an attachment download or requests sensitive information – and always exercise extreme caution when providing sensitive information online.

Choosing your own title company - yet another reason

Two of the largest financial institutions in the country are having their feet held to the fire over blatant violations of the Real Estate Settlement Procedure Act, according to a complaint filed in federal court last week by the Consumer Financial Protection Bureau and Maryland Attorney General.

The complaint involves employees of Wells Fargo and JPMorgan Chase who participated in a kickback scheme with a now-defunct Maryland title company Genuine Title in which loan officers received cash, marketing materials and customer information in exchange for referrals. 

"This type of quid pro quo arrangement is illegal, and it’s unfair to other businesses that play by the rules," said Maryland Attorney General Brian Frosh.

More than 100 loan officers from at least 18 Wells Fargo branches allegedly participated in the scheme as did at least six loan officers from three Chase bank branches, according to the complaint. Consequently, Wells Fargo is facing $24 million in civil penalties and $10.8 million in redress while JPMorgan Chase faces $600,000 in civil penalties and $300,000 in redress. 

The details of the complaint reveal blatant RESPA violations going back to 2009 and involving thousands of home loans and tens of thousands of dollars. Genuine Title went so far as to foot the bill for direct-mail campaigns and branded marketing materials. They even paid some loan officers cold, hard cash. 

One former Wells Fargo loan officer was singled out by name in the complaint for accepting cash payments. His then-girl friend, now-wife was also identified in the complaint for taking the payments on behalf of the loan officer to disguise the arrangement. They will pay a $30,000 penalty. 

The huge dollar figures and overt rule-breaking are not what makes this case special, though. What makes it special is the offenders got caught and will face their day in court. For those of us in the trenches – the so-called "rule abiders" of the title industry, fighting the good fight independently – we are aware that this kind of thing occurs all too frequently and we can only shake our heads. 

The truth is most consumers still don't know they can select their own settlement service provider. Nine times out of ten, the homebuyers we encounter say they just went along with whatever their agent or lender recommended because it was convenient. They have no idea about the potential for a conflict of interest and how they could be saving hundreds of dollars by choosing their own independent title company. 

The only way to combat this sad fact of the home buying experience, is to get the message out to consumers as well as the businesses who seek to take advantage of them. We fully support the CFPB and other government regulators who shine a light on these anti-consumer and, often, illegal business pursuits. 

How to make sure you have "good funds" for your real estate closing

Wire transfers are a very common aspect of the real estate settlement process. But for many consumers, the purchase of a home is their only exposure to wire transfers, which can lead to confusion and unnecessary stress. 

To clear up any confusion and to help prepare our clients for settlement, here is rundown of some of the questions we hear and things to consider regarding wire transfers.

I wired directly via my bank’s website and money has left my account – why don’t you have it yet?

This is a question I have gotten more than once.  Did your bank charge you a fee for this "wire"?  The answer to this follow-up question, is usually "no" or "I paid a small fee." What your bank may not be telling you is that you are actually ordering an ACH (Automated Clearing House) transaction and not a wire directly from your bank to our bank.  

You will need to check in with your bank prior to sending out funds to make sure the fee you are paying is for sending a wire and not a fee for an expedited ACH.  Our bank will not accept ACH transactions for the purchase, because the ACH funds are not considered good funds.

Why aren’t ACH funds "good funds" for purchasing my home?

An ACH goes through a clearing house. Because these are bulk transactions, the funds are not "liquid," or immediately available funds. ACH funds can be adjusted, changed or recalled by the clearing house without authorization from the accountholder. In general, our bank will not accept ACH funds for any of our accounts

Can I write a personal check?

The short answer is no. Personal checks are not considered immediately available funds. Unfortunately, not all personal checks are good when they are written – either by mistake or by design, clients sometimes fudge that funds are available. There are occasions when we can accept a personal check for a small amount of funds at closing.

What are "good funds" for closing?

A wire, cashier’s check, or a certified check is considered good funds. A wire is considered good funds because the funds are wired from your bank directly to our bank via the Federal Reserve and are immediately available. Another example of good funds would be a cashier’s check. These funds are immediately available from the bank.

A certified check is not often used as a vehicle for funds, but is still acceptable. A certified check is a personal check that has been stamped and certified by a bank official the funds are available in the account. The bank then make sure those funds are only good for that purpose. Banks rarely issue certified checks, as it is much easier to issue a cashier’s check. 

So, how do I make sure I have "good funds" for closing?

All banks are different. Have a conversation with your bank early in the process. Find out what your bank needs from you to wire funds. Ask your bank if there are any fees involved to wire funds and how much lead time the bank needs for getting funds to closing on time. Also, make sure you coordinate with your settlement agent and lender to ensure you have the correct bottom line and have the amount of funds to close readily available prior to closing.   

Taking these steps early really help to make the buying process a little less stressful.   

Hazard Insurance – If I change it, will it affect my mortgage?

If you are like everyone else, you have at least one New Years’ resolution.  Some choose weight loss, others fiscal awareness, other personal awareness, etc, etc.  If one of your resolutions is to lower your monthly costs and you are looking at changing your hazard / homeowner’s insurance, make sure you talk to your mortgage company.  

Why, you ask?  Well, you want to make sure you have enough insurance to meet the lender’s guidelines and the lender has notice of your insurer.  

What do you mean by "having enough insurance to meet the lender’s guidelines"?

If you change your insurance (lower your coverage), then there is a possibility you no longer have the amount of coverage required by your lender. Your lender is guided by the type of loan you have and specific guidelines provided to the bank either internally or by the government. You can contact your lender to get the list of requirements/guidelines for your coverage, so you can make sure you get the insurance that is best for your budget AND meet those requirements.

Why does it matter is I change insurance companies as long as I have the same or better coverage?  

In the documents you typically sign when getting a loan, there is typically a document stating you will keep your insurance intact and you will provide the lender proof of insurance – regardless of whether you have your insurance paid out of escrow or you pay the insurance directly. The lender will need to make sure the new company and the new policy meets the appropriate guidelines. The lender will also be checking to make sure it is listed on your policy as a mortgagee and the mortgagee clause is correct.

(Please note that the lender is focused on the fact that you are changing your insurance company. Does not matter if you are leaving your coverage the same, increasing coverage or decreasing coverage.)  

What happens if I do not contact the lender when I change to a new insurance company?  

The lender usually checks on insurance annually – whether you have a current policy and it has the appropriate coverage. If the lender checks in with the old company, it is likely the old company will report they no longer insure your property. When this happens and no new insurance company information has been provided to the lender, the lender will send a letter to you allowing you to provide proof of insurance. If you do not respond to this letter, the lender will put into place its own insurance – forced-place insurance is not easy to get removed.  

What is the bottom line?

When and if you change your hazard/homeowner’s insurance, call your lender to make sure those changes will not affect your loan servicing.

Maximum VA loan county limits updated for 2015

The Department of Veterans Affairs Loan Guaranty Program recently published county "limits" to be used for VA Loans effective January 1, 2015.

Please note, these limits do not reflect a maximum amount that an eligible veteran is permitted to borrow, but rather, reflects the VA’s maximum guaranty amount for a particular county.

The maximum VA guaranty amount for loans over $144,000 is twenty-five (25%) percent of the 2015 VA limit. For example, an eligible veteran may borrow up to $625,500 to purchase a property in Washington, DC (2015 VA limit), with the VA guaranteeing twenty-five percent (25%) of the loan amount, or approximately $156,375.00. These amounts have decreased dramatically in most area of the DC Metro Area compared to the 2014 VA limits.

The limits listed below are for some counties in Maryland and Virginia, as well as for the District of Columbia. To get a complete list of the county limits for 2015, please click here. [Please note, if your county is not listed on the county limits chart on the VA website, the 2014 limit is $417,000.]

State County 2015 VA Limit
DC District of Columbia $625,500
MD Anne Arundel $517,500
MD Frederick $625,500
MD Howard $517,500
MD Montgomery $625,500
MD Prince George's $625,500
VA Alexandria $625,500
VA Arlington $625,500
VA Fairfax $625,500
VA Falls Church $625,500
VA Fauquier $625,500
VA Loudoun $625,500
VA Manassas $625,500
VA Prince William $625,500
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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.