CHCP Wire Transfer & Fraud Prevention 3

Question 1

A seller's proceeds check is mailed but never arrives. The seller claims fraud. Which document best helps the closing professional trace the funds?

Accepted Answer

The HUD-1 or Closing Disclosure showing disbursement details

Answer

The Closing Disclosure or HUD-1 records all disbursements including check numbers, amounts, and payees, making it the primary document to trace where proceeds were directed.

Question 2

Which federal law requires financial institutions, including some title companies, to file Suspicious Activity Reports (SARs)?

Accepted Answer

The Bank Secrecy Act (BSA)

Answer

The Bank Secrecy Act mandates that covered financial institutions file SARs with FinCEN when they detect suspicious transactions that may indicate money laundering or fraud.

Question 3

What is 'vishing' in the context of real estate wire fraud?

Accepted Answer

Voice phishing — using phone calls to manipulate victims into revealing information or sending funds

Answer

Vishing uses phone calls where fraudsters impersonate settlement agents, lenders, or banks to convince parties to wire funds or disclose sensitive account information.

Question 4

When a wire transfer is received into an escrow account, what should the closing professional verify before disbursing funds?

Accepted Answer

That the wire amount matches the Closing Disclosure and the funds have fully cleared

Answer

Funds must be verified as received, cleared, and matching the expected amount on the Closing Disclosure before any disbursement to prevent shortfalls from returned wires.

Question 5

Which scenario best illustrates 'seller impersonation fraud' in a real estate closing?

Accepted Answer

A fraudster poses as the property owner and instructs the closing agent to send sale proceeds to a new bank account

Answer

Seller impersonation fraud occurs when criminals assume the identity of a legitimate property owner to redirect sale proceeds, often targeting vacant land or properties with no mortgage.

(CHCP) Certified Home Closing Professional Practice Test

(CHCP) Certified Home Closing Professional Practice Test

CHCP Wire Transfer & Fraud Prevention 3