7 On Your Side: How to avoid the most devastating real estate scam

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Nina Pineda reports on how to avoid real estate scams.

It's a savvy real estate scam that can cost you your life savings in an instant.

The fraud happens just before you close on a house. Now thieves are using more complex hi-tech tools to con you out of your cash.

And the FBI says these types of real estate of scams are soaring. Last year nearly $1 billion was stolen from home buyers just before they closed.

"We had to work many years to save this money," said one husband and father. After saving for a lifetime, he was finally ready to move his kids and parents from Staten Island to the suburbs of Westchester.

His American dream was a bigger home, better schools, and more green space for his family.

But that dream dissolved into dust just days before closing when his down payment on the new house, $70,558, disappeared into cyberspace.

"This was a disaster," said the devastated home buyer. "This is a horrible, taking the money in a few minutes."

A week before closing the family missed a huge warning sign; an email from their attorney warning to "ignore any requests asking for funds to be wired."

As a result, the home buyer didn't know a scammer hacked into their real estate attorney's email account, sending out spoof emails - with a subtle change - adding an "A" to the attorney's last name. The home buyer thought the emails were real.

The next part of the con was a phony closing document, sent by the scammer complete with info like the sale price, the loan amount, even the exact amount of cash needed to close, all completely accurate.

With the con complete, the scammer emailed new instructions for payment. Instead of bringing a check to the closing, the buyer was told to wire the money, not to the seller, but to a different person's bank account - someone named Orlando in Southampton, New York.

"It's unbelievable," said the home buyer and victim, shaking his head. As a result, the home buyer wired his life savings to a scammer he had never met.

The FBI say this so-called "man-in-the-middle" email access scam first surfaced five years ago and has grown into a $5.3 billion problem claiming many victims in our area, like Jackie and Jimmy Moore.

Just hours after these newlyweds popped the champagne on their new house, Jackie and Jimmy had to surrender the keys back to the seller.

"It's like a bad dream, like it didn't really happen," said Jimmy.

The $139,000 down payment they saved was stolen in seconds after the bank and account number to wire closing costs was abruptly changed in an email that appeared to come from their title company.

"It hit me that everything we planned for is over," said Jackie.

7 On Your Side helped recover all of their funds, but often with cyber fraud it's too late.

"One of your banks got some money back, half the money," said the home buyer.

Our homeowners got some great news Tuesday. Just a few minutes before we aired, we heard from HSBC - one of the banks the home buyer used to legitimately wire money to scammers.

The bank went the extra mile - making a one-time exception - agreeing to return all the money lost in that transfer, $21,000.

Previously, another bank used by the homeowners to wire funds to scammers, gave the homeowners a partial refund of $28,500. We hope to recover the rest of the funds and make the family whole.

Right now the NYPD tells us this case is currently under investigation. The homeowner says police told him it now has surveillance video showing a man picking the money up at a bank in the Hamptons.

Some very important big takeaways here. The simplest way to foil the fraud is NEVER wire money when you close on a house. Just do it the old fashioned way and bring a bank check to the closing.

But if you insist on wiring, ALWAYS confirm any wiring instructions with all parties involved by phone. But don't use the phone number on an email that could be phony. Take the extra step and verify you're calling the right person.

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