Wire Fraud at Closing: Warning Signs

For a seller, wire fraud at closing usually goes after two payments: your sale proceeds on their way to your bank, and the loan payoff that escrow sends to your lender. The warning signs are an email, text or call with new or "updated" bank instructions, a request to switch from a check to a wire or to a different account, a sender address that is almost right, and urgency to act before you can call anyone. The defense is simple and has to be followed every time: give your account details to escrow only through a channel you set up, and confirm any change by calling escrow at a number you found yourself, never one in the message.

This article is part of the cash buyer vetting section. It covers the seller's side of closing: the money coming out of escrow.

Where the money moves when a house sells

Every one of these payments passes through the escrow holder, and every one has instructions a criminal would like to replace:

PaymentFromToWhat to confirm

Buyer's deposit and purchase funds

The buyer

Escrow

Escrow tells you in writing that the funds arrived

Loan payoff

Escrow

Your lender

Escrow obtained the payoff figure and instructions from the lender itself

Other liens and tax arrears

Escrow

The lienholder or tax collector

The demand came from the lienholder, not from a caller

Your proceeds

Escrow

You

Your account details, given once, through a channel you set up

On a cash sale the first row is the buyer's job, and a cash buyer wires its funds into escrow like anyone else. The last three rows are where a seller is exposed, and a cash sale does not reduce that risk. Fewer parties means fewer inboxes to hack, not none.

How the scheme works

The FBI's Internet Crime Complaint Center describes business email compromise in real estate plainly. It "targets all participants in real estate transactions," including sellers. Once criminals get into a participant's email, "they are able to monitor the real estate proceeding and often time the fraudulent request for a change in payment type (frequently from check to wire transfer) or a change from one bank account to a different bank account under their control."

California's Department of Real Estate, in its November 3, 2025 consumer alert, says criminals "hack into email accounts of real estate professionals or escrow officers" and "impersonate them." It warns about "slight changes in email domain names that appear legitimate at first glance." The message does not have to come from a stranger. It usually looks like it comes from your escrow officer, your agent or your lender, because the criminal has read their real emails.

Warning signs on the seller's side

• New instructions near closing. An email saying escrow needs your bank details again, "in a new format," or through a link.
• A change in how you get paid. A message proposing a wire instead of a check, or a different account than the one you gave.
• A payoff that changed. A "new" payoff address, bank or amount for your mortgage, home equity line or reverse mortgage, sent to you instead of to escrow.
• A near-miss address. One letter off in the domain, or a familiar display name over an unfamiliar address. Check the full sender address, especially on a phone.
• A call asking you to "verify." A caller who already knows your file and wants your account or routing numbers.
• Urgency. "The wire must go today or closing slips." A real escrow officer will wait while you call back.

Protecting your proceeds

The Consumer Financial Protection Bureau's guidance on closing scams, written for buyers but just as true for sellers, starts before closing: pick two trusted contacts, such as your escrow officer and your agent, write down their names and phone numbers, go over the payment process with them by phone or in person, and consider a code phrase. Its rule: "Never follow instructions contained in an email." The FBI adds: "Use secondary channels or two-factor authentication to verify requests for changes in account information." The DRE's version: "Always verify payment instructions with a phone call to the escrow officer or real estate agent," especially for wire transfers, and "Use multi-factor authentication (MFA) for any email accounts linked to real estate transactions."

In practice, for a seller:

1. When escrow opens, ask how it will collect your payout instructions and how it confirms them.
2. Give your account details once, by the channel escrow named, and keep a note of the date and the person.
3. Treat any later message about your account as fake until you have called escrow on the number you saved at the start.
4. Ask escrow to confirm it received the payoff demand directly from your lender.
5. Watch your account on the closing date. The FBI's list ends with monitoring accounts "for irregularities, such as missing deposits."

The payoff wire

Your loan payoff is often the largest payment escrow sends. In California, the payoff figure comes from a payoff demand statement, a written statement the lender prepares on a written demand from the borrower or someone authorized for them, usually escrow. Escrow requests it from the lender and pays from it. So a payoff figure or a set of payoff instructions that reaches you by email or phone, from anyone, is not how this normally works. Forward nothing and pay nothing; call escrow and ask whether the demand it has came from the lender, using the lender's number from your own statement.

Is your escrow holder who it says it is?

Before any money moves, confirm that the escrow holder is real. California's Escrow Law makes it unlawful to do business as an escrow agent without a license from the Commissioner of Financial Protection and Innovation, so an independent escrow company should appear in the DFPI's records at dfpi.ca.gov. Banks, insurers, attorneys acting for a client and real estate brokers in their own transactions fall under the law's exemptions instead. Find the escrow company's phone number from that record or a directory, not from an email. If a buyer insists on an escrow company you cannot find, that is reason enough to stop; earnest money: how much and who holds it covers choosing and approving escrow.

If money went to the wrong account

The FBI says "time is of the essence." Its steps, and the FTC's:

• Call your bank, or the bank that sent the wire, right away and ask for a recall of the funds. The FTC's advice is to tell them "it was a fraudulent transfer" and ask them to reverse it.
• Call your escrow officer on the number you saved, so escrow can contact its bank and stop any further payments.
• "Regardless of the amount lost, file a complaint with www.ic3.gov, as soon as possible." Report it to the FTC at ReportFraud.ftc.gov as well.
• Talk to an attorney about who is responsible. That is a legal question, and the answer depends on the contracts and the facts.

Glendora closings and the files that need extra care

A Glendora sale records with the Los Angeles County Registrar-Recorder at the county documentary transfer tax rate; unlike neighboring Pomona, Glendora adds no city transfer tax. That makes the settlement statement simpler to read, which helps: every line you can account for is one fewer place for a strange instruction to hide.

The Glendora files that need the most care are the ones with the most wires. Long-held foothill homes in family trusts often close with proceeds going to the trustee and then out to beneficiaries in other cities or states. Every beneficiary is another inbox and another set of instructions. Have each one confirmed by phone, and if the trustee has questions about distributions, that is for the trust's attorney. Warning signs of a cash home-buying scam covers the earlier risks, before escrow ever opens.

What this looks like in practice

These are the kinds of files that come in, described without names or figures.

• A Glendora trustee coordinating proceeds for siblings in three states, who set up a phone confirmation with escrow for each beneficiary before closing.
• A seller who received an email that looked like escrow's, asking to "re-confirm" bank details through a link, two days before closing. The call to the saved number settled it.
• An owner with a reverse mortgage who was asked by a caller to confirm a new payoff address and called the servicer directly instead.

Whether you hold a cash offer or are still deciding, you can ask for a second opinion on a cash offer or call (909) 498-3977. You get a written as-is offer from a pool of thousands of local buyers and investors and an open-market read, a preliminary estimate, not an appraisal, each with the comps, the deductions and the net; when listing nets more and you have the time, the written recommendation says so. There is no cost and no obligation to get the two numbers and the written report. The checklist for the buyer itself is in the guide to vetting a California cash home buyer.

Sources

• FBI Internet Crime Complaint Center, Business Email Compromise: The $50 Billion Scam (June 9, 2023): ic3.gov (accessed November 6, 2026)
• California Department of Real Estate, DRE Urges California Consumers to Be Aware of Real Estate and Mortgage Crimes (November 3, 2025): dre.ca.gov (accessed November 6, 2026)
• Consumer Financial Protection Bureau, Mortgage Closing Scams: How to protect yourself and your closing funds (June 3, 2019, archived): consumerfinance.gov (accessed November 6, 2026)
• Federal Trade Commission, Asked to wire money? Cut the cord (August 7, 2023): consumer.ftc.gov (accessed November 6, 2026)
• California Civil Code section 2943 (payoff demand statements): leginfo.legislature.ca.gov (accessed November 6, 2026)
• California Financial Code section 17200 (escrow agent license requirement): leginfo.legislature.ca.gov (accessed November 6, 2026)
• California Financial Code section 17006 (escrow law exemptions): leginfo.legislature.ca.gov (accessed November 6, 2026)
• Los Angeles County Registrar-Recorder, Documentary Transfer Tax general information: lavote.gov (accessed November 6, 2026)

Mr. Cali Offers is not a law firm or an escrow company; questions about responsibility for a lost wire are for an attorney. Cash offers come from independent buyers and investors who buy for their own account and may resell for profit; a cash offer is generally below what the open market would bring. Any value shown is a preliminary estimate, not an appraisal. Nothing here is legal, tax or financial advice.