Why closings are a target
Fraudsters often watch compromised email accounts belonging to buyers, agents, attorneys, or title companies and wait until large sums are about to move. They then send instructions from a lookalike address or from the real account, usually with urgency about a deadline. In New York, attorneys commonly handle closings alongside title companies, which means many parties exchange wiring details by email. Sellers can be targets too, when payoff or proceeds instructions are altered. Once funds land in a fraudster's account, they are frequently moved again quickly, which is why speed matters.
The first hours after you discover it
Call your bank immediately and ask it to contact the receiving bank to request a recall or freeze, then confirm the request in writing. Submit a complaint to the FBI's Internet Crime Complaint Center too, since it can sometimes coordinate with banks when reports come in quickly. Tell everyone involved in the transaction, using a phone number you already trust rather than one from the suspicious email. Preserve the emails, including full header information, and screenshots of the instructions you received. Secure your email account with a new password and multi-factor authentication, but do not delete messages or wipe devices before getting advice.
Sorting out responsibility
When funds cannot be recovered, the question becomes who bears the loss, and the answer depends heavily on the facts. Courts tend to look closely at whose account was compromised and who had the clearer chance to stop the fraud, including what verification steps were agreed on or skipped. Title insurance generally covers defects in title rather than diverted funds, so coverage for the loss is not a given. We review the communications, the contracts, and any insurance policies to identify potential claims against the parties and banks involved. If the purchase still needs to close, we also look at how to protect the deal while recovery efforts continue.
