Real estate fraud on the rise in Maine as scammers take advantage of a tight housing market and desperate buyers

Lewiston – Today’s housing market is, by many measures, the toughest ever in Maine and across the country. There are simply more potential buyers than inventory – an imbalance that is unlikely to go away for months or years to come.

Despite concerns about inflation and rising mortgage rates, the insatiable demand for new and used homes continues.

Existing and single-family home sales in Maine fell 21.48% in March 2022 compared to March 2021, due to a recent inventory shortage, along with pent-up buyer demand, according to the latest figures from the Maine Association of Realtors. But home prices continued to rise, with the median sales price up 21.4% to a median price of $325,000 compared to March 2021, which showed median sales prices at $268,500.

Androscoggin County bucked the trend in March, seeing sales increase 9.22% in March 2022 compared to March 2021 from 217 homes to 237 homes.

“The market is more fast-paced than it has ever been,” said Madeline Hill, president of the Maine Association of Realtors. “And when you’re in a fast-paced environment and in a very competitive environment, you have to think and act fast.”

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The frenzy of buying and selling has created stress and tension in an already difficult process. Buying a home is, for most people, the biggest purchase they’ll make in their lives. For some, it is the only purchase of this magnitude. But even for the seasoned home buyer and seller, buying or selling a home has taken on a whole new set of variables that we had never seen before in the industry.

All this pressure created opportunities for scammers who see potential for gains. Make no mistake, today’s transactions and payments are larger with almost all transactions taking place, opening the door to professional thieves and hackers working together.

Real estate crime on the rise

Nearly 3 million consumers in this country reported a loss of $5.8 billion from all types of fraud in 2021, up 70% from 2020, according to the latest report from the Federal Trade Commission. Fraud scams followed by online shopping scams were the most common category of fraud.

Real estate is the third most common sector for fraud attempts after construction and commercial services, according to findings from a 2019 report from the Department of the Treasury.

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Housing scams are prevalent in all aspects of the housing industry, with criminals targeting tenants and landlords. It’s a steadily increasing crime and it’s easy to see why – more and more real estate transactions are being made by default, and the amount of money involved has grown to hundreds of thousands of dollars or more per transaction.

In its 2021 Cybercrime Report, the FBI identified 42 real estate/rent crime victims in Maine, with total reported losses from the crime of $489,309. He identified 14 topics that the report defined as “the individual who committed the crime.” Subject-related losses reached $528,953 in Maine. All statistics come from victims who report to the FBI.

Nationwide, there were 11,578 victims of real estate/rent scams, who reported losses in 2021 of $350,328,166, a number that jumped significantly from 2020, when losses of about $213.2 million were reported.

The federal agency is tasked with investigating, tracking, and reporting cybercrime through the Internet Crime Complaint Center, known as IC3. Relies on crime victims to report details online outlet.

How often real estate scams work

Email scam

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The thieves behind online fraud are becoming increasingly sophisticated, tech-savvy, and persuasive. You would probably never talk to them if you became a target, because they are always communicating via email and text messages. This is the first red flag. They are involved, even to the point of answering questions like, “Will I have access to the kitchen and the rest of the house” from a potential tenant.

By far, the most common real estate crime is cyber fraud. What usually happens is a file The real estate agent’s email or company email is hacked, revealing buyer information and closing details. The fraudster will then impersonate the seller, and ask the owner company to transfer the escrow money to the fraudster’s account instead. Or the copycat will copy the company’s letterhead and email address and request that the funds be closed to be delivered to them.

This is what almost happened to a buyer working through the Portside Real Estate Group. Yarmouth Designated Broker Mike LePage explained: “Well, we got a call from a bank that it had detected wire fraud from a buyer trying to buy a property, which was about two or three days away.”

LePage will only say that the transaction amount was more than $100,000. “He received the wiring instructions from the address (company), from someone who looks exactly like (they represent) the address company.”

LePage said the closing statement for the buyer’s deal was attached to the wiring instructions, before the real estate company got the statement—something that should never have happened.

LePage believes that what happened is that the real estate company emailed the closing statement to the real estate company, which then emailed the information to the buyer, which is familiar, but was somehow intercepted by the scammers. The fraudsters then impersonated the real property company and sent the information to the buyer, with instructions to transfer the money to the fraudster’s account.

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How was all of this revealed?

“When the buyer called the number in the telegraph scam, they answered it with the name of the address company,” LePage said. “(But) when the bank called the number, it rang, rang, rang, rang.” Bank employees immediately became suspicious, most likely because the phone number provided by the scammers did not match the actual company number.

The bank stopped the wire transfer, and no money was lost in this case. The FBI is investigating.

Other types of real estate scams

There is also title or deed theft, where the title deed of the house is obtained illegally and the thieves then take on the identity of a real estate agent or other professional and then try to sell the house to an unsuspecting potential buyer.

Finally, there’s the old rental scam. The Maine Attorney General’s Office posts the following description and warning on its website:

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“This scam is usually shown on Craigslist or other websites. Recently, a homeowner in Maine discovered his home, along with photos of the property, listed for rent on Craigslist without his knowledge. The ad included a Nigerian email address for responses and the fictitious rent payment. A shopper was willing to rent the house by sending her money to Nigeria. Fortunately, the shopper contacted the homeowner in Maine and discovered the scam before sending any money to the scam artist.

Other consumers aren’t just so lucky when they arrive at their paid home for a week’s vacation or into a new apartment to discover it’s not for rent at all. Remember – never send money in response to an Internet offer or rental without first making sure that the ad is legitimate or from a well-known and trusted company.

What can you do to protect yourself? Most people do not know where to turn when they become a victim of real estate fraud. Some turn to the local police. Many do nothing, embarrassed of being deceived and not knowing how to handle the situation. Officials acknowledge that the number of scams and frauds reported to them is much lower than the actual number.

There are a number of precautions you can take to protect yourself, but perhaps the best advice is to never send money to someone you never know, no matter how upset you are with a rental, and not to give your Social Security number to someone who emails you an app. never.

Take the time to check the real owner’s name in the city or county where the home is located. If the name does not match the name on the rental ad, it is most likely a scam. For a complete list of ways you can protect yourself and who to contact if you feel you are the victim of real estate fraud, See related story.

In Maine, the attorney general’s office does not prosecute cable fraud; Most online scams are federal crimes and often involve interstate commerce. However, the office can provide assistance. A spokesman for the bureau acknowledged last week that real estate frauds are on the rise and that vigilance is required.

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“It is clear that real estate scams are becoming increasingly common and complex,” the person said. “We encourage anyone who has experienced real estate transaction fraud or electronic fraud to contact our Consumer Protection Department so that our office can assist victims directly or direct victims to the appropriate enforcement agency.”

People can call the Attorney General’s Consumer Hotline at 207-626-8849 or 800-436-2131 at the toll-free number in Maine. The hotline accepts calls from 9 a.m. to noon and 1 to 4 p.m. Monday through Friday.

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