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Charlotte Closing Attorney Thwarts Fraudulent Cash-Out Refinance Scheme

The real estate industry is increasingly becoming a prime target for wire fraud, a challenge that demands heightened vigilance and sophisticated countermeasures from professionals.

A recent incident in Charlotte, North Carolina, serves as a stark reminder of the cunning tactics employed by fraudsters and the critical role that real estate professionals play in safeguarding transactions.

Understanding the Threat

In a distressing occurrence, an individual in Highland Creek was nearly defrauded by scammers attempting a cash-out refinance the owner's paid-off home using his stolen personal information. The scammers planned to redirect almost $450,000 to themselves under the guise of the homeowner. This incident underscores the allure of real estate transactions to fraudsters, given the significant sums involved.

Lessons from the Front Line

The prevention of this fraud was largely due to the astuteness of Charlie Hands III, an attorney, and his paralegal, Devera Alston. Their experience, further enriched by insights from a Wire Fraud Conference presented by the North Carolina Real Estate Commission, North Carolina Bar Association, and Investors Title Insurance Company, proved invaluable.

The conference underscored the importance of confirming a homeowner's identity in person, a practice that Hands and his team diligently followed. Despite an unsuccessful attempt to verify Helmick's identity via Zoom, they took the extraordinary step of visiting the home directly. This face-to-face verification revealed the fraudulent attempt, as Helmick was unaware of any refinancing activities in his name.

Thanks to the proactive measures taken by Hands Law Firm and UMortgage, the scam was thwarted, preventing potential financial loss and damage to Helmick's credit. This incident highlights the critical need for vigilance and the implementation of stringent verification processes in the real estate industry.

Proactive Client Engagement as a Lead Generation Tool

Beyond safeguarding against fraud, engaging with past clients through monitoring title and property records presents a unique opportunity for lead generation. By conducting regular checks for any changes and communicating these findings, real estate professionals can reinforce their commitment to their clients' well-being.

Monthly or Quarterly Check-Ins: Setting up a schedule to review changes in title and property records for past clients can provide peace of mind to both the professional and the client.

Personalized Communication: Sending personalized emails to inform clients of the checks and any findings (good or bad) not only keeps them informed but also keeps the professional top of mind for future real estate needs.

This approach not only enhances client relationships but also positions the professional as a vigilant and caring advisor, potentially leading to repeat business and referrals.

What systems or processes do you have in place to prevent wire fraud for your clients and customers? Let us know in the comments or share with the class in an upcoming CE class!


WSOC-TV. (14 Feb 2024). Scammer tries to refinance house behind owner's back; lawyer saves the day. Retrieved February 22, 2024.

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