Couple pushes for more cybersecurity protection after home sale targeted
BATON ROUGE, La. (WAFB) - A couple is pushing for cybersecurity insurance to be required for mortgage and title companies after the sale of their home was allegedly targeted by hackers.
Tim and Joya Smith thought they had done everything right. Back in April, they listed their house and it sold quickly but after closing, that’s when they say things got interesting.
“She gets a phone call saying that we owed and that we were late on our payment,” said Tim. “You know, like what, late on our payment? So then we called the title company to ask them what was going on.”
They got a letter through email asking them to contact the mortgage company as soon as possible and telling them to pay up.
“I mean we thought we could move on and start looking for another house,” said Joya. “If we had gotten into that process, who knows what kind of legal mix-up that might have been just trying to get another house purchased?”
A string of text messages from early on in the investigation shows where an independent IT expert audited the accounts. At the time, that expert believed there was a hack and the money ended up in Cincinnati.
While the couple claims they were assured there would not be any issues down the road, they say that was not enough of a guarantee. The couple says they pressed the title company over whether they had cybersecurity insurance to protect themselves against this kind of attack. But they say they never got a straight answer.
“We never got an answer on that,” said Timothy. “We asked we asked the title company and like specifically, do you have insurance for these kinds of transactions? And we would get this runaround answer, you know, something to the effect of, well, you know, this happens, you know, so much. And it is like I didn’t ask you if it happened so much. I ask you, do you have insurance? And to this day, that answer that the answer to that question is yet to be given.”
When WAFB reached out to the company, a spokesman said there was insurance that covered this transaction. They added it’s the title insurance that they’ve had the entire time.
Natasha Engle is the realtor who represented the couple during the sale.
“My clients were actually drug through it for almost two months with no answers,” said Engle.
WAFB’s Scottie Hunter asked Engle if she knew what happened to the money.
“No. It could be in an offshore account somewhere lost. I mean, nobody has come forward to say exactly if they knew that they were definitely, you know, basically stolen through wire fraud from the title company to another account that obviously was not the actual mortgage company,” said Engle.
Engle says her advice to her clients was to get an attorney involved.
“I mean, number one, any title company that you are referred to or that you plan on closing at, I think that’s the number one question that’s going to be asked now is, do you carry cybersecurity insurance? Do you have like the proper protection on emails? You should find out if they have checks and balances on where these wires are going to when it comes to payoffs,” said Engle.
Even though they did not send the wire themselves, the couple’s attorney told them not only could they be sued over the missing money, but the bank could also foreclose on the property, which could hit their credit hard.
“Oh, yeah. I mean, obviously, your heart sinks to the ground because, you know, my clients are preparing to go to buy another house,” said Engle. “And if that mortgage is still sitting on their credit, that stops everything. Like they wouldn’t be able to purchase another home.”
WAFB wanted to know what the chances are that something similar could happen to others.
Norman Morris is the CEO of the Louisiana Association of Realtors. He says with so much money changing hands online, criminals are getting smarter in how they target these kinds of transactions.
“We’re seeing it more and more as we move forward with technology emerging,” said Morris. “What we’re seeing, Scottie, is that a buyer could be working with the title company and a hacker actually gets into that system and sees all the correspondence and communication back and forth between the two. They go in and send a spoof email to the buyer that looks identical to the title company’s correspondence that the buyer’s accustomed to. They hit send without picking up the telephone to verifying with the title company. And what happens is that all those dollars are sent to an account by that bad actor. Once that’s done, it’s very rare that you can get that money back.”
He tells WAFB that while there’s no state or federal law that requires companies to have cyber security insurance, they should.
“I think as more and more time goes along and what we’re seeing, I think it’s definitely should be a practice to look into it and it certainly will help if you have it,” said Morris.
In this case, the title company did covered the money that was missing and the couple’s mortgage was taken care of while the case continues to be investigated.
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