Homebuilders are to blame for the current housing and mortgage crisis, according to a report released by the Laborers’ International Union of North America (LIUNA).
The group’s report focuses on mortgages originated between 2005 and 2006 in Maricopa County, Arizona by the lending units of three of the nation’s largest homebuilders, including Richmond American, Lennar, and KB Home.
More than one-third of the mortgages originated by these homebuilders in the county are five-year adjustable-rate mortgages expected to reset between 2010 and 2011, and with many of these homeowners now underwater, they could face serious payment shock.
Per the report, in just the last year the value of Lennar homes has declined $61,600, KB Home values have sunk $55,600, and Richmond American Homes are worth $49,500 less.
In the KB Home Santarra Development in Buckeye, Arizona, home values have dropped a staggering $78,800 in the last year, troubling because 55 percent of mortgages held are five-year ARMs, and 63 percent of purchase loans have a second mortgage.
“Former Countrywide-KB Home Loans Regional Vice President Mark Zachary has said in court that KB Home pressured its lending joint venture to engage in systematic mortgage fraud to drive sales, including encouraging inflated appraisals, assisting buyers in supplying false income information, and approving loans without review or documentation,” the release said.
LIUNA, which earlier this year exposed the homebuilder tax break in the Foreclosure Prevention Act, is calling on agencies such as Fannie Mae and Freddie Mac to place greater scrutiny on the mortgages originated by homebuilders and their mortgage lender partners.
It’s been a difficult time for everyone. But coming into the new year, many have found the past twelve months have landed them with lower credit scores than ever before. This can damage not only your financial reputation, but also your prospects. So, what’s the effect of a high or low credit score, and how can you improve yours?
Why Is a Good Credit Score Important?
It’s like a digital record of financial viability, which is reflected in a credit score. Purchases made using credit cards and monthly debt repayments boost your score. A low credit score makes borrowing money, securing credit cards with good interest rates, or qualifying for a mortgage difficult. Conversely, maintaining a good credit score can:
Increase loan amounts available
Lower interest rates on loans
Increase the probability of loan acceptance
Provide access to buy now, pay later credit offers
Boosting Your Score Is Easy
Knowing everything about your credit score is important. So, you must check it whenever possible to see where you can give it a boost. Let’s discuss eight easy ways to improve your credit score In 2021.
#1 – Know Your Score with a Free Credit Report
To improve your credit score, you need to know what it is. There’s plenty of companies out there that can give you a free credit report card, such as TransUnion, Equifax, and Experian. Most of these provide paid services to keep on top of changes. If you have the spare income to subscribe, it can significantly help your credit score. Keep reading to find out how.
With companies like Experian, you are entitled to one report free annually. And you may even be eligible for another if you’ve recently been refused a loan or employment based on a poor credit score.
#2 – Check If Your Report Is Accurate
Identity theft and credit fraud are rife these days. Once you have your report, take the time to review your accounts and dispute any you know aren’t right. Even if you don’t get lost money back, having false debts removed from your credit report can boost your score.
#3 – Pay Your Bills on Time
Perhaps the most frequent cause of lowered credit scores is late payments. To give your credit a boost, make sure to pay any bills and loan repayments on time. Using direct debits is a reliable way to make sure payments reach their destinations on time. And monthly reminders on your phone or work computer can help if you’d rather not automate your payments.
#4 – Open a Secured Credit Card
The main benefit to get this card is that you’re more than likely to get approved if you don’t have stellar credit. You’ll need to make a deposit upfront. And they often don’t require a credit check to apply. Another huge benefit is you’re going to build your credit just like any normal credit card would, if the issuer reports to the credit bureaus. When choosing any credit card to help boost your credit, make sure they report to the bureaus before applying.
#5 – Get a Credit-Builder Loan
To get a credit-builder loan, you don’t need to have a good credit score. You just need to prove that you have enough income to make the payments.
You regularly can’t get to the cash until you have completely reimbursed the advance, which implies you can work on your savings and your credit simultaneously.
#6 – Check Your Credit Report for Errors
The first thing to do is to look at your Credit Report. Second, You can get one from each of the major bureaus. You’re entitled to a free copy every 12 months. Once you receive these, pay detailed attention to any errors such as an incorrect address, the spelling of your name, open accounts being reported as closed, outdated information, and many more. Check here for more information.
#7 – Get a Credit Card, and Request More Credit
Spending credit is the best way to earn better credit. So, look for a credit card that fits your needs. You can use it for predictable expenses you can pay off as soon as you get paid. Simply using the card and paying it off at the start of every month shows you can use credit responsibly, which should allow you to request more credit to use and improve your debt ratio, which also affects your credit score. These things can help boost your credits score effortlessly.
#8 – Patience Is a virtue
Repairing your credit score won’t be fast or without hurdles. Take your time to think through all your financial choices, limit your access to new credit avenues unless they fit into your overall credit goals, and keep on top of payments. It may take months for the results to show, but once they do, it’ll be worth it. Hang in there!
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Think Geek Squad meets The Property Brothers. At a National Association of Realtors summit last month in Miami, innovators, investors and real estate professionals got together to chat like chatbots about PropTech. That’s the hip insider term for “property technology.”
Just as technology has changed the way we shop, get to places and communicate, it is also upending how we buy and sell houses. NAR’s director of emerging technology, Dan Weisman, agreed to tell me about the meeting’s biggest takeaways minus the geek speak:
Q: Will technology make the process of buying or selling a house less painful?
A: The role of technology in real estate is to streamline the process and reduce stress points. Most of us are familiar with DocuSign or similar technologies that offer the ability to e-sign legal documents. That has simplified what used to be a cumbersome process. Remember when submitting an offer or signing loans docs required wet-signing paper forms and sending them overnight? Now we can sign away hundreds of thousands of dollars by auto-filling our initials on our phones with our fingernail.
We’re trying to do that for other steps in the process, like the negotiations. Submitting an offer, waiting for a counter, working through two real estate agents, that is an area that needs work. Some companies have tried to create offer platforms, but none has worked out yet. That’s because we still need brokers to provide a level of control to make sure information gets passed along correctly. That said, technology is evolving that could eliminate financing delays. The fact that it often takes 45 to 60 days to close on a mortgage is an area that needs improvement.
Q: What are the downsides of the new PropTech?
A: Fraud risk. As much as we want to capitalize on technology, we have to watch for scammers. The more access they have to data, the greater the potential for fraud. These scammers can fake you into thinking they’re somebody they’re not. Deepfakes can essentially re-create a person and their voice. If you’re being asked to wire money or provide account information over the internet, pick up the phone and call the person you are dealing with and ask, “Was this you?” We’ve heard too many stories where money disappears.
Q: So how does all this AI horsepower change the way we choose a real estate agent?
A: We are still a people business. Most sellers and buyers need a real estate agent to help them navigate the process. However, today you also want an agent whose company has good IT behind it. The threshold question to ask when selecting an agent is: How are you using technology to make the process of buying or selling smoother?
Q: What was the biggest game-changer you saw at the summit?
A: Perhaps the most revolutionary change we’re seeing is AI technology that can help homebuyers see what a home could look like if they renovated. The online tool REimagine Home lets you upload a picture of a room and reimagine it. For instance, I took a picture of a bedroom and turned it into an office. You can change the furniture, flooring, wall color, light fixtures, and get a glimpse of what could be. For exterior improvements, a company called Hover allows prospective buyers to do the same.
Learning how to build credit can help if you have a bad credit score or want to improve your current score. You can start by getting a secured credit card, becoming an authorized user, or getting a cosigner on a loan.
If you have bad credit due to derogatory marks, those marks can stay on your credit report for up to seven to ten years, depending on the type of mark. A low credit score leads to higher interest rates, larger deposits, and a low approval rate for loans and lines of credit. Those just beginning to build their credit will have similar challenges, but there are ways to build or work to repair your credit score.
By learning ways to build credit, you will not only improve your financial health, but it can reduce your stress around finances as well. In this article, we go over 12 tips that can help regardless of your specific credit situation.
Table of contents:
Get Added as an Authorized User
Try a Secured Credit Card
Find a Cosigner
Report Utilities and Bills
Get a Credit-Builder Loan
Pay Your Bills on Time
Regularly Check Your Credit Scores and Reports
Dispute Errors on Your Credit Report
Pay Off Collections
Open New Lines of Credit
Request a Credit Limit Increase
Have a Good Credit Mix
1. Get Added as an Authorized User
Becoming an authorized user is one of the most popular ways to build your credit score because you benefit from someone else’s good, established credit history. Also known as “piggybacking,” becoming an authorized user is when someone adds you to their credit card account.
The odds of approval on a credit application are lower if you have a low or bad credit score, so this is a way to start building credit and improve your ability to get your own card later. When you’re an authorized user, the card company will also report the payment history for your credit report when the primary account holder uses and makes payments on their credit card.
You can have a friend or family member add you as an authorized user. While this can be a great way to build credit, it’s useful to know that this can also negatively affect your or the other person’s credit should either of you miss payments or over utilize the credit line.
2. Try a Secured Credit Card
A secured credit card is a type of credit card that most people can acquire through their bank regardless of their credit score. The primary challenge of getting a credit card with a low credit score is that your credit score is one of the wayslenders evaluate risk. If you don’t have a credit history to show that you know how to manage credit or have derogatory marks on your report, credit card companies may be reluctant to loan you money via a credit card.
Secured credit cards are different because rather than borrowing from a financial institution, you borrow from yourself. You do this by depositing money into the credit card account, which becomes your credit limit. For example, if you opened a secured credit card with a $500 deposit, you will have a $500 credit limit. As you use the card and make regular payments, these will be reported to the credit bureaus to help build your credit history and potentially help improve your score.
3. Find a Cosigner
Similar to becoming an authorized user, you can benefit from a cosigner with a good credit score. On your own, you may not receive approval on a personal loan or car loan. When you have a cosigner with a good credit score, the lender sees loaning to you as less of a risk because the cosigner is also attached to the loan.
Although a cosigner can help with the loan approval process, like becoming an authorized user, your credit can also affect that of your cosigner, so it’s important to make full and on-time payments.
4. Report Utilities and Bills
When learning how to build credit, many people don’t realize that most utilities and bills are not reported to the three major credit bureaus. Fortunately, you can purchase services that will report your utilities and bills. Services like Credit.com’s ExtraCredit® subscription help build credit history for people with no credit history or low credit scores.
5. Get a Credit-Builder Loan
Credit-builder loans do just what you think they do—they are loans that help you build credit. Unlike typical loans, where you fill out an application and receive the funds, credit-builder loans are a sort of savings program. When a bank or financial institution provides you with a credit-builder loan, the funds go into an account, and you make payments on the amount. As you make your payments, the lender reports them to the credit bureaus to help build credit history and potentially improve your score with your on-time payments.
Many credit-building programs have higher interest rates than traditional loans due to the higher risk, but they can help your score in the long term. Once you pay the credit-builder loan off with interest, you receive the full loan amount.
6. Pay Your Bills on Time
If you already have lines of credit or loans, paying your bills on time is one of the best ways to continue building your credit score. Your payment history is 35% of your FICO® credit score, which is why paying your bills on time is helpful.
One of the best ways to ensure you never miss a payment is to set up automatic payments for the minimum amount on your credit cards and bills. You can always make additional payments, but when the money comes out of your bank account automatically, you no longer have to worry about forgetting a payment.
7. Regularly Check Your Credit Scores and Reports
A great habit for building credit or trying to maintain a good credit score is to check your credit score and report regularly. Unlike a car experiencing mechanical issues, there are no warning lights or alarms that go off when your credit score drops or a negative mark appears on your report.
Checking your scores and reports lets you know if there are any issues sooner rather than later. It can also help you stay motivated as you work to build your score as you see the number start to rise.
Although your credit report doesn’t notify you about changes automatically, Credit.com’s ExtraCredit® offers credit monitoring as part of the subscription service. Credit.com also offers a free service whereyou also get your free credit report card to analyze your current score for issues that need your attention.
8. Dispute Errors on Your Credit Report
If you regularly check your credit score and credit report, you may find errors. Sometimes, bill and credit card companies don’t properly report your payments, which can hurt your credit. Credit card fraud and identity theft are also more common than you may think, and this can also cause your credit score to drop. Should you find errors on your credit report, it’s your right to challenge them. To file a formal dispute, you need to write a dispute letter showing documentation of payments and other information to the creditor reporting the error. If you have other potential errors, you can request a verification of the reporting from the credit bureaus. They will investigate then respond with the results, typically within 30 to 45 days.
9. Pay Off Collections
As you now know, derogatory marks on your credit report can have a negative impact on your credit score. When someone doesn’t pay their bills, the account becomes delinquent and a collection agency could buy it. You can find the information about the collection agency on your credit report and then contact them to pay off the debt.
In some cases, a collection agency will let you settle the debt for a fraction of what you owe. When you agree to pay off or settle the debt, you can ask for a pay-for-delete letter. After you pay off a collection agency, the derogatory mark can stay on your credit report for years. A pay-for-delete letter is an agreement that the collection agency will have the collection item removed from your report once you pay it. Get this agreement in writing!
Before negotiating with a collection agency, it’s helpful to also know your debt collection rights.
10. Open New Lines of Credit
For those with an established credit score, a good way to continue improving your credit score is to open new lines of credit. In addition to your payment history, credit utilization is the second-most important factor for your credit score. Your credit utilization is worth 30% of your FICO credit score, and new lines of credit can help keep your utilization low as long as you don’t use them.
Credit utilization is the amount you owe compared to your overall credit limit, and ideally, your utilization should be under 30%. For example, if you have five credit cards with a combined $5,000 credit limit and owe $2,500, your utilization is at 50%. If you open up a new line of credit for an additional $5,000, raising your total limit to $10,000, your utilization is now only 25% if you owe $2,500.
11. Request a Credit Limit Increase
If you don’t want to open new lines of credit but still want to build your credit, you can request a credit increase from your credit card company. This accomplishes the same thing with regard to credit utilization as opening new lines of credit. If you have a good payment history with your credit card company, they are more likely to increase your credit limit, lowering your utilization rate.
12. Have a Good Credit Mix
Your credit mix shows that you can handle multiple types of credit. The two primary credit types are installment and revolving credit. Revolving credit is a line of credit that allows you to spend up to the credit limit, make payments, and then use the credit again. Some common forms of revolving credit include:
Credit cards
Personal lines of credit
Home equity lines of credit (HELOC)
Installment loans are lines of credit that give you an amount you pay down to $0 over time, and then the account closes. Examples of installment loans include:
Auto loans
Home loans
Student loans
Personal loans
Check Your Credit and Start Building It Today
Checking and monitoring your credit scores and credit reports is the key to building your credit and maintaining a positive score. As you continue to build your credit, you may begin to save money on interest rates and have additional financial freedom as you can access more opportunities.
If you want to begin your credit-building journey, Credit.com’s ExtraCredit subscription offers credit monitoring, bill reporting, personalized credit and loan recommendations, and more. You can also access your free credit score and free credit report card through Credit.com today.
In the list of things you want to be doing around the holidays, fending off scam artists has to be at the bottom. And yet, the holidays can be a prime time for scammers hoping to take advantage of the busy season. One fraudulent transaction is easily overlooked in a bank statement full of gift purchases, and there may not be time to dispute suspicious charges when you’re hosting out-of-town guests.
Research-based advisory firm Javelin Strategy & Research defines an identity fraud scam as a tactic that a criminal uses to steal someone’s personal information for the purpose of illegal financial gain. Consumers lost $43 billion in 2022 to these scams, according to Javelin’s 2023 Identity Fraud Study.
If there’s good news, it’s that there were fewer reported victims of identity fraud in 2022 as compared with 2021, with a 17% decrease in the amount of money lost to scams. The bad news is that scammers have become more sophisticated in their methods and have a new tool in their arsenal: artificial intelligence. AI programs can be used to generate scam emails, text messages or audio recordings that mimic the speech of loved ones.
An awareness of scammers’ latest tools and tactics is a potent defense against identity fraud. Here are five credit card scams to watch out for this holiday season.
1. The Amazon scam
Amazon will be the go-to holiday shopping destination for many people. But as our inboxes fill with order confirmation emails and delivery updates, be cautious about messages that claim to be from Amazon. Scammers may contact you by email, text or phone in an attempt to steal your credit card information. They may say that you need to update your payment method to prevent your Prime membership from expiring, or that your Amazon account will be deleted unless you verify your account by providing payment details.
How to fight it: If you’re unsure if an email or text message is legitimate, don’t click on any links in it. Instead, log in to your Amazon account and go to the Message Center, which contains a record of all communications from Amazon. If you’re contacted by phone, don’t provide your credit card information. Amazon won’t ask for payment information by phone. And never input your Amazon payment info on any website except Amazon.com.
2. The romance scam
The holiday season may heighten feelings of loneliness, which can make romance scams particularly effective. After creating a fake profile on a dating website or social media platform, scammers will strike up a relationship with their victims before making a plea for money. Common reasons for needing money include medical or legal bills or funding for an investment opportunity. The 2023 Consumer Impact Report from the Identity Theft Resource Center, a nonprofit that helps victims of identity crimes, noted that romance scams consistently report six-figure losses, highlighting the seriousness of this scam.
How to fight it: If someone you’ve met on a dating website or social media platform asks you for money, research their name and do a Google reverse image search of their profile picture to try to figure out if they’re masquerading behind another’s identity. Investigate any detail that sounds suspicious; you don’t have to automatically accept what someone says as truth.
Don’t give payment details or personal information that could be used to open credit cards to someone you haven’t physically met.
3. The gift card scam
Gift cards make great stocking stuffers or last-minute gifts, but they’re also a favorite target of scammers. The scammer will contact victims by phone, email or text and ask them to purchase gift cards, usually as a form of payment for an outstanding bill or as prepayment for a service they’re offering to render.
For example, a person posing as a computer technician says he can remove a virus from your laptop in exchange for a $100 Amazon gift card. Once the gift card has been bought, the scammer asks for the gift card’s number and PIN. That way, the scammer doesn’t need to expend any effort getting their hands on the actual card.
How to fight it:No legitimate business or government agency accepts gift cards as payment. Whenever you buy gift cards, keep the receipts and take pictures of the card numbers and PINs in case you need to file a report with the gift card company or the Federal Trade Commission.
4. The charity scam
Donations tend to spike between Thanksgiving and Christmas, and some scammers capitalize on the increased spirit of generosity during this time. Pretending to solicit donations on behalf of a charity, scammers will ask for donations by phone, email, text or a crowdsourcing platform. They may prompt you to enter payment information on a bogus website or give it over the phone.
How to fight it:When you’re asked to make a donation, get the charity’s name and the cause it supports. If you aren’t sure whether you’re corresponding with a legitimate charity, take a beat to do more research. Look up the charity’s name on a website that vets nonprofits, like Charity Watch or Charity Navigator.
When making donations, pay with a credit card if possible: The major card issuers have zero-liability policies that offer you financial protection from fraud. Payments made in cash, cryptocurrency or by wire transfer are harder to recoup; if you’re asked to donate in those ways, it could be a sign that you’re dealing with a scammer.
5. The lottery scam
Coming into a windfall of cash during the holidays sounds too good to be true, and it probably is. In this scam, the criminal claims you’ve won a physical or monetary prize, which is yours as long as you remit payment or hand over your payment information to cover a processing fee.
How to fight it: Ask for the name of the company claiming you’ve won the sweepstakes, and contact them to confirm whether you’re a winner or not. Take care, though, to look up the company’s information yourself rather than using a phone number provided to you by the person saying you’ve won.
A real sweepstakes doesn’t require payment; a real prize is, by definition, free and won by chance. You don’t need to send payment or disclose personal information to win a true lottery.
How to minimize damage and recover from a scam
Even the most vigilant among us can fall victim to a scam. However, there are steps you can take to minimize the damage and work toward recovery.
Prevention: Freeze your credit file with the three major credit bureaus: TransUnion, Experian and Equifax. Scammers can’t open a new credit line in your name when a freeze is in place. You might also elect to receive alerts of suspicious account activity on your credit card, or even when any transaction is made.
Mitigation: If you think your credit card has been compromised, place a lock on the card so it can’t be used until you unlock it. Then, call your card issuer — ask for the fraud department, if one exists — and communicate your concerns.
As the early November trial date approaches, US District Court Judge Lydia Kay Griggsby approved a request from Mosby’s defense to relocate the trial from Baltimore to Greenbelt, a suburb of Washington, DC. This decision stands out, given that even in high-profile cases, defense teams often struggle to obtain such changes in venue. Prosecutors noted … [Read more…]
Today is the 15th anniversary of the collapse of Lehman Brothers. The great financial crisis (GFC) revealed a defective supply chain, metrics unable to assess local risk and markets incapable of answering Ben Bernanke’s defining question – “what’s this stuff worth?”
The requirements of a Digital Housing Platform were well understood long before the crisis. The components needed to move housing past a costly, error prone, disconnected system include:
Authentication: Identity is the key control point in any digital interaction. The capability to “identity proof” the participants in a complex, multi-party transaction is fundamental to establishing trust, reducing fraud and removing friction between “relying parties.” The capability to authenticate, issue and revoke digital credentials is central to controlling access, verifying rights and accepting content from supply chain partners.
Authorization: A digital loan file of record accessed by a broad range of trusted identities from lenders to guarantors to investors requires a permission structure. What functions are individuals and organizations allowed to perform including viewing, editing, printing, exporting and approving? The capability to enforce these rights can eliminate errors and rework. The result should be collapsing costs and cycle times, improving quality, reducing repurchase risk and certifying that a loan, and its related assets are “Fit 4 Sale.”
Non-Repudiation: E-sign became federal law in 2000 but digital signatures are only a subset of the integrity component. Investors require assurance that a file, note or instrument reflects the verifiable intentions of the committed parties. Sensitive content must be protected in motion over networks and at rest within repositories. Technologies like encryption help deliver certainty that content has not been tampered with.
Validation: Mortgage is a manufacturing process with end products dependent on accurate information. Data is imported from multiple sources including credit agencies, public records aggregators, appraisers, inspectors, title and insurance firms and Realtors. How do we know that the data is correct, can the source be verified, does it meet quality standards and can compliance with pricing guidelines be guaranteed?
Federation: Integrating the fragmented, localized and diverse housing ecosystem is the major challenge for any network delivering content from trusted sources. Standard agreements define shared responsibilities and what happens when mistakes happen. These policy considerations, enforced by technology and legal conventions, are required for interoperability among supply chains and between competing “Super Apps.”
Registration: A golden record of who owns the asset is a prerequisite for any commercial trading system. Improving the ability of MERS to verify and transfer ownership required capital, time and technology. Extending the registration component to county recording offices was another platform foundation.
Transactions: Platforms are “plug and play” once federated policies are widely implemented. Matching and clearing trades in open exchanges for multiple asset classes is a core ICE capability. The Ellie Mae component provided a critical mass of connections to begin the process of reinventing the property transaction.
Compensation: Payments reveal the end points of the ad-hoc networks that characterize real estate. A servicing system that touches the consumer every month can be extended to all the participants in the original transaction. As every consumer facing commercial platform will attest — payments are the prize.
Information: Listings are on platform and new metrics will assess the risk, value and volatility of submarkets.
Integration: The sector reimagines portals, anchors federations, converges markets and makes money.
The DC3 platform launched in 1937 featured five components that had to be invented to make commercial air travel possible. Apple’s iPhone integrated 12 new components in 2007, and its reach has been extended to multiple vertical markets including banking. Housing finally has a Digital Platform that can attack several hard problems. What’s next?
Stuart McFarland is the former EVP Operations and CFO at Fannie Mae, EVP General Manager at GE Capital Mortgage Services, and CEO at GE Capital Asset Management.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Stuart McFarland at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]
Uno de los mayores errores que se pueden cometer a la hora de protegerse de las estafas financieras es pensar que uno es demasiado listo como para dejarse engañar.
“Todos somos vulnerables: todos podemos caer en una estafa si se dan las circunstancias adecuadas”, afirma Eva Velásquez, presidenta y directora general del Centro de Recursos contra el Robo de Identidad, una organización sin fines de lucro que ofrece asesoramiento y asistencia en temas relacionados con el robo de identidad.Para mantenerse protegido, hay que aceptar este hecho, añade.
“Si nos fijamos en los perfiles de las víctimas que han presentado denuncias, vemos que hay de todo, desde personas con un alto nivel de estudios e ingresos hasta las personas más vulnerables de nuestra población”, afirma John Breyault, vicepresidente de Política Pública, Telecomunicaciones y Fraude de la Liga Nacional de Consumidores, una organización sin fines de lucro que defiende los intereses de los consumidores.
Aunque no existe una “solución infalible para mantenerse a salvo de todas las estafas”, como dice Breyault, hay estrategias que uno puede emplear para reducir el riesgo (en inglés). Aquí tiene cuatro de las más importantes:
Cuelgue el teléfono y “vaya a la fuente”
Si se pone en contacto con usted alguien que dice ser su banco u otra empresa conocida, dé por terminada la conversación y llame usted mismo al número verificado de la institución, dice Velásquez. “Siempre decimos: ‘Si usted no inició la comunicación, acuda a la fuente'”, añade.
De lo contrario, no sabrá quién está al otro lado de la línea, dice, sobre todo porque los estafadores pueden falsear el número que aparece en el identificador de llamadas para que parezca legítimo.
En algunos casos, puede que le interese visitar personalmente su banco para que se lo aclaren. Cuando Thorn Roberts, propietario de una pequeña empresa en Elizabeth, West Virginia, recibió una solicitud de pago (en inglés) que no reconoció, fue a su banco a preguntar.
“Sabían que era una estafa”, afirma. Como resultado, canceló inmediatamente sus cuentas y creó otras nuevas. Gracias a su rápida reacción y a la ayuda del banco, su dinero estaba seguro.
Proteja y controle sus cuentas
Las prácticas básicas de seguridad online (en inglés) también pueden ayudarle a protegerse, dice Velásquez. Recomienda activar la autenticación multifactor en sus cuentas financieras, crear contraseñas únicas y no compartir datos personales en Internet, como su fecha de nacimiento.
Jason Zirkle, director de capacitación de la Association of Certified Fraud Examiners (Asociación de Examinadores Certificados de Fraude) y ex analista de fraude de las fuerzas policiales, sugiere revisar sus cuentas financieras al menos una vez a la semana e investigar inmediatamente cualquier cargo no identificado. Incluso un pequeño cargo erróneo podría sugerir que alguien tiene acceso a su cuenta, señalando el comienzo de un problema mayor.
Familiarícese con las estafas más comunes
La Comisión Federal de Comercio informa que las principales estafas de 2022 incluyen a personas que se hacen pasar por instituciones como bancos, sorteos falsos y falsas ofertas de empleo. “No es necesario que usted se convierta en un experto en cada una de ellas, pero sí que comprenda las características de la mayoría de las estafas: Primero se ponen en contacto con usted, le ponen algún tipo de cebo y le generan una sensación de urgencia”, afirma Zirkle. Después, le piden dinero o información personal, la que utilizan para acceder a su dinero.
Eso es lo que le ocurrió a la madre de Ken Westbrook, ex ejecutivo del gobierno y experto en seguridad, a principios de este año. Apareció en su computadora una falsa ventana de soporte técnico, probablemente procedente de un anuncio malicioso. La conectó con delincuentes que la convencieron para que les llamara y les enviara tarjetas de regalo y cheques de caja con el pretexto de proteger sus cuentas bancarias de los piratas informáticos.
“Mi madre sabía que las tarjetas de regalo eran una señal de alarma, pero lo hizo de todos modos porque les tenía miedo a los delincuentes”, dice Westbrook, que vive en la región de Washington, D.C. Con el tiempo, Westbrook descubrió lo que estaba ocurriendo y le puso fin, pero solo después de que su madre perdiera miles de dólares (en inglés).
Estos estafadores “se hacen pasar por el personal de soporte técnico más amable con el que jamás uno haya tratado”, afirma Chris Pierson, fundador y CEO de BlackCloak, una empresa de ciberseguridad. “Instalan herramientas de gestión remota para ver lo que hay en su pantalla y luego pueden extraer sus archivos y extorsionarle”.
Denuncie las estafas y sea su propio defensor
Denunciar las estafas a organismos públicos y organizaciones privadas permite hacer un mejor seguimiento. Aunque no existe una fuente centralizada de investigación de fraudes, usted puede denunciarlos a la Comisión Federal de Comercio, la oficina del fiscal general de su estado, el FBI, la comisaría de policía local, el departamento de fraudes de su banco, el Rastreador de estafas del Better Business Bureau y el Centro de Recursos contra el Robo de Identidad (el ITRC, por sus siglas en inglés), entre otros.
La mayoría de las personas que pierden dinero por estafas nunca vuelven a verlo. “Lo primero que tiene que hacer es aceptar que su dinero probablemente ha desaparecido y que no lo recuperará”, afirma Zirkle. Sugiere “ser su propio abogado” ante su banco y la policía. En algunos casos, la entidad financiera o la policía podrían ayudarle a recuperar parte o la totalidad del dinero.
Sin embargo, algunas pérdidas son más difíciles de cuantificar. “Además de un delito financiero, es un delito emocional”, dice Westbrook. “A la gente le afecta para el resto de su vida. Lo que le digo a todo el mundo, y se lo digo a mi madre, es: ‘No es culpa tuya. Los ladrones trabajan para bandas de crimen organizado que son muy buenas en lo que hacen'”.
Este artículo fue redactado por NerdWallet y publicado originalmente en inglés por The Associated Press.
Federal agencies urged mortgage companies and banks to be more vigilant in reporting compromised real estate transactions to their local financial crime units and to do so in specific ways that would increase the likelihood of an investigation.
According to representatives from both the Federal Bureau of Investigation and the Secret Service during a panel discussion Monday, instances of wire fraud, home equity theft, investment scams and elderly-related fraud have ticked up, while the methods used by bad actors have become more nuanced.
“[The mortgage industry is a target-rich audience for fraudsters] and they are targeting title companies and real estate brokers by compromising business email accounts. We see a lot of that,” said Stavros Nikolakakos, supervisory special agent at the Secret Service at the Compliance and Risk Management conference hosted by the Mortgage Bankers Association in Washington D.C. Monday. “If you don’t have direct contact information of your local law enforcement, [you should definitely establish that relationship].”
A way for mortgage companies to help government agencies, such as the FBI and Secret Service, catch bad actors is by being mindful in how they fill out consumer complaints including the Internet Crime Complaint Center (IC3) form, which the bureau monitors and the Suspicious Activity Report (SAR) form.
“For those of you that enter SARS, I would strongly encourage you to not hold back in filling out this information, put your conclusion and the amount stolen at the very top,” Nikolakakos said. “When you have agents reviewing these SARS they only skim them. They cherry-pick because agents are looking for easy arrests and they’re trying to find the very best cases. “
Timothy Wu, Supervisory Special Agent, Financial Crimes Section, Money Laundering, Forfeiture, Bank Fraud Unit at the FBI, added that the volume of fraud complaints received can make someone’s “eyes start to glaze over.”
“Fraud in the mortgage space is not the same as in 2008 and our fraud portfolio is much smaller,” he added. “We are seeing HELOC fraud and application fraud — nothing new or ground breaking — but these practices have accelerated and gotten better.”
Cash attained by these criminal acts are usually transferred to Eastern Europe, West Africa or China by money mules, Nikolakakos added.
Statistics published by the FBI show that business email compromise scams related to real estate set a record for dollar losses in 2022. The 2,284 complaints received last year amounted to losses totaling $446.1 million, compared with $430.5 million in 2021.
Those targeted by fraudsters have about 72 hours to report the event to the government before it becomes harder to investigate.
In a separate panel addressing fraud mitigation, Steve Safavi, vice president of mortgage fraud at Mr. Cooper noted that one of the best ways to prevent wire fraud is to be mindful of emails received prior to closing and the domain that is being used.
“As busy as you are at the end of the month, trying to get something funded it can get by,” he said. “Best thing to do is for title companies to call the lender and verify the wiring instructions. Have them repeat the payoff statement to you instead of vice versa.”
As fraud risk has increased, companies in the financial services sector have turned to vendors to protect their transactions and infrastructure. For example, recently Tata Consultancy Services announced a partnership with FundingShield to the fintech’s wire fraud prevention solutions available to the IT consulting company’s clients.
If you’re in the real estate industry, you certainly know that the average time from mortgage application to closing has been hovering around 50 days. It’s not a point of pride or badge of honor for any mortgage, title, real estate or valuation firm. If anything, it’s been one of the most stubborn (and most publicized) blemishes on the image of the entire home-buying process. Much of that average time to close tends to pile up in the title and settlement stage of the process.
Even many real estate professionals can’t really tell consumers what’s going on during that period. But most understand that there are a lot of phone calls, emails and texts exchanged. More than a few real estate agents have come to dread calling the closing company to find out when they can close. Loan officers dread having to email an appraisal firm for the report they’re waiting on.
Title agents dread being blamed by everyone from the buyer to the seller, from the real estate agent to the lender, for that delay that falls between the signing of a sales agreement and the signing of the closing documents.
We’re in an automation revolution
We’ve been in the midst of an automation revolution for some time now. Our industry as a whole has made tremendous strides in that regard. A potential homebuyer can today apply online and possibly be approved in minutes. More closings are happening remotely via convenient, digital processes. Consumers can tour a potential home without leaving their own living rooms. Yet, what’s often most remembered is surprisingly not the moment the keys are exchanged. It’s the unending back-and-forth from business to business and the waiting.
We can start with the little things
Status checks between different firms. Missing information that’s required to process the loan or finalize the closing. Small but vital tasks that fall through the cracks because someone didn’t get an email or went on vacation without others knowing where that task stood.
It’s also the sheer volume of questions asked and answered in the course of an extremely complex process and the typical consumer’s extremely limited understanding of that process. Also adding to the pressure to streamline is the overall economic trend toward nearly instantaneous, do-it-yourself purchases (a la Amazon), virtual tours for new listings and even a rise in FSBO listings. Consumers (and real estate professionals) are increasingly demanding that their transactions be conducted quickly, whether they involve socks, new cars or houses.
It’s also things like wire fraud, its potential, and some of the less effective or manual means of combatting it. It’s traceable to overuse and misuse of phones and email as project management queues and order-entry portals. In many ways, that 50-day turn time can be traced to the way we communicate with each other.
Does anybody inside the industry truly believe that a 50-day average is the best we can do, or that we’re making any more money because of it? Most likely the converse is true. While there’s not a single silver bullet out there to eradicate the root causes of that wasted time, knowing the cause of several of these inevitable delays is a great start towards streamlining them.
Where automation can help
It’s easy to think that investing in technology can solve some of our biggest communications bottlenecks. Where the right technology is strategically selected and wisely implemented and used, it certainly can. It starts with the planning. Owners and decision-makers should not start their search with a technology in search of a problem, or the coolest demo, but rather with a thorough diagnosis of their own operations. At what points in the workflow and pipeline does the march toward closing inevitably slow down or even sit for days?
Odds are, you’ll find that, especially in the title, escrow and settlement phase of the home purchase, your biggest time traps data entry, data extraction or moving a part of the file from one system, company or technology to another.
Look for solutions that can help remove as many silos from the process as possible. If you know that most of your biggest broker clients strongly prefer to work with text messaging for communications, rolling out another smart phone app to communicate with agents—especially when they might already have 10 other title agency apps they need to log into every other day—may not be the best way to streamline effectively.
Where it takes more than just tech to streamline
Admittedly, every settlement services business is unique. They serve different markets with different rules. There are many unique situations making it nearly impossible to build a universally applicable technology to create truly seamless pipeline.
If you look around, you’ll see numerous examples of otherwise efficient and effective employees doing the right job with the least effective tool. How many of your employees tend to use their inboxes and email folders as virtual project management queues or for some other function they weren’t truly intended to be?
How many of your teammates are using their personal cell phones to text real estate agents, unintentionally creating a serious business risk by using a communications channel which is unmanaged and unmonitored? How many voice mails does your team leave for Realtors, consumers, lenders or appraisers on a daily basis? How fast—if at all—do they get a return call that resolves what drove their call in the first place? How do your new orders come in? If you’re like many title agents, you get some by email, a few through an app or your website, a couple by text and maybe even something in the mail. How do you manage to get all of that information from different sources into the same production platform?
It’s not a simple fix, but odds are, as an industry, we could shave days or weeks off of the time it takes to finalize the closing by rethinking how we do it at the tactical level as well.
It takes a human touch to bring the American Dream to light, no matter how much we automate. It’s a myth to imagine that Chat GPT or Blockchain or some other technology will eventually automate the process 100 percent. Buying a home is a major event in many people’s lives. Most will wish to look to a knowledgeable source and experience human interaction at some point when buying or selling a home.
We’d be much better off, however, by reviewing our workflows and how we perform them. By attacking the many seemingly minuscule time wasters and introducing better means to-communicate—or even eliminating altogether the need to communicate in some places—we’ll improve the real estate transaction.
Hoyt Mann is a co-founder and president of McKinney, Texas-based alanna.ai, a conversational AI assistant for title agents.
This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.
To contact the author of this story: Hoyt Mann at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]