Welcome to the Real Tea Podcast brought to you by Tennessee REALTORS®. I’m your host, Angela Shields. This podcast is created for Tennessee REALTORS® to get the “tea” on all things real estate in Tennessee. We’ll bring you engaging conversations with esteemed guests in the real estate industry and cover a wide array of topics including current events, governmental affairs, education, and legal updates.

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Angela Shields (AS): Okay, so today we are having another episode of the Real Tea Podcast and it’s a pretty serious topic that we are going to cover. I want to welcome Ryan Byrne with us on the episode today. Ryan, thank you for being here.

Ryan Byrne (RB): Thank you for having me.

AS: Absolutely. And before we jump into the topic, let me give just a little bit of your background. So, Ryan has been practicing real estate law since 1994. And he is licensed in Tennessee and Mississippi and in Arkansas. So, I imagine you see a lot when it comes to all three states. You obtained both your undergraduate and your law degree from the University of Mississippi. And I’m reading here that you are an avid Old Miss supporter. Now, you know most of our fans are going to be Tennessee reporter supporters. I, for one, am a Georgia supporter. So, we all are in the SEC. So, I guess that’s okay.

RB: We got a big game coming up in a couple of weeks.

AS: We sure do. So, so we’ll be friends today. That Saturday we might we might like pick at each other a little bit.

RB: Let’s do it.

AS: He’s a senior partner at Byrne Westmoreland PLC, a real estate and estate planning law firm with five off-offices across West Tennessee and North Mississippi. So, a lot of responsibility there. And one thing that we’re particularly proud of is he is a TREEF Certified Instructor and has TREEF Tennessee–and was TREEF Educator of the Year in 2015. Right before we came on, I was just saying that he taught a class at our recent conference, which we were really excited about. Got a lot of great reviews on that, and that’s kind of what’s bringing us here today so that we can continue on with a lot of the information that we had at that particular class. So, I’m going to stop there. Just I wanted to give everybody a little bit of a background of how we got here. One of the things in your bio that’s not written that I have to ask because we are the Real Tea Podcast. We ask every one of our guests is what do you take in your teacup?

RB: Like a little kid, lots of cream, lots of sugar.

AS: Are you not a huge tea fan?

RB: Actually, I am. My mom was from Ireland, so I grew up more with tea than coffee.

AS: Wow, how exciting.

RB: Yeah.

AS: Wow. Let’s go ahead and start spilling the tea on everything having to do with fraud in real estate because we’re hearing more and more about all these sophisticated fraud schemes that are starting to target the real estate transactions. So, let’s start out by just asking you what types of fraud are you seeing that’s most frequent right now?

RB: Well, fraud is–we’ve come a long way from the email from the Nigerian prince, you know, offering to give you $64 million dollars all of your personal information. These schemes are getting more and more sophisticated. The big one right now is seller impersonation fraud. That’s probably the number one fraud that’s happening across the country. And keeping up with these type of frauds is vital in our industry for closing attorneys, REALTORS®, and so I hope that your members will understand the importance of what we’re talking about today.

But seller impersonation fraud is probably the number one fraud going on right now. This is where a fraudster poses as a property owner. They enlist a REALTOR® to sell the property–to list and sell. And unfortunately in these situations, the REALTOR® becomes an unwitting accomplice to this crime, and so these folks are very sophisticated. This type of scam takes a lot of preparation. They are getting fake email addresses established, fake IDs; they’re using bogus social security numbers and they concoct a story as to why they are not local. And it’s sort of a big mess right now; that the story is they no longer live in the area– They–they can’t attend a closing in person for whatever reason, but lo and behold, “I have a notary in my office, so don’t worry about that,” “We only need to communicate in certain manners,” “We–I’m much more comfortable with email or text. And that can be for a variety of reasons,” “I’m a very busy businessman or businesswoman,” “I live 10 time zones away.”

There’s going to be a story as to why they want to dictate the mode of communication with the REALTOR®. And they want the REALTOR® to find a cash buyer and get a quick sale done, probably for less than market value. So in those facts that I just said, there are probably four or five little things that if taken individually would not mean very much, but together it should be a giant red flag to the REALTOR®. And we’ve got to be able to recognize those red flags.

AS: Sure, because you do have some clients that REALTORS® work with–that truly are from out of the area and they truly do meet some of those qualifications you just met. So, when you break it down, if you were advising a REALTOR® to look for those red flags, what are the key red flags that they should look for?

RB: Well, I think part of it has to do with identity. We are now in a situation and in a world where a REALTOR®’s going to have to identify be be just as voracious at looking at the identity of the parties to a transaction as opposed to just the information about the property, the square footage, the tax annual taxes… all the things that they examine for in doing for their clients. We–we’ve got to do the same thing with individuals. On the closing side, what we’ve had to do, there are new identity verification softwares that closing offices are having to use. There are several on the market and I know that Forewarned is now a tool that REALTORS® are using for the same purpose: to identify the individuals in a transaction. So, that that’s first and foremost.

And you just got to take a look at the story that’s being told to you and and sort of pinpoint where it’s questionable so that you’re not going through down the the path of a scam.

AS: So, with all of the AI today, is that particular tool, the AI tools, or that– Is that making it easier for the the thief, if you will, to to come in and both

RB: 100%. Yeah, absolutely. The AI is making these scams far easier to succeed and far harder for us on the other side to detect. It is very easy for a scammer to use AI to come up with very official-looking documents, deeds, lien releases, copies of trust documents showing that I’m the trustee of the owner’s trust. It’s putting title professionals and closing attorneys in a position of not necessarily being able to rely on the recorded document. We’re having to now go behind that to verify the veracity and truthfulness and the authenticity of documents. Unfortunately, that’s going to add time and money to the transaction.

On a big-picture level, this is causing a problem nationwide. It– If we are unable to rely on our current land record system to know that the documents that are being recorded that they’re authentic or not, we will have a huge problem in this country. And that’s where we’re at right now. We’re trying to figure out where do the brakes need to be tapped for this to slow down this type of fraud.

There is a movement in many states, Tennessee included, to try to restrict who can record a doc. Currently, anyone that shows up with a deed or a lien release or any doc an affidavit of heirship or anything that might help them in a scam, anyone who shows up with their $20 can record a document at their county recorder’s office. And so there’s a movement to try to make it to where you’ve got to be a closing attorney or title company, an employee of the state, or a lender to record. Unfortunately, as you know, legislation follows way behind the scammers, and we’re not there yet. We’re probably years away from that. Same thing in other states. So, we just have to be vigilant until the law catches up.

AS: Yeah, that that is sad that that it it is further behind than it should be. Are you finding that there are particular properties that seem to be the target of these scams?

RB: Sure, and these they the scammer has done their research. Again, this is not a scam that they just dive into. These scams take months and months of research–many county records, deeds, land records are now online, and the more counties that come online, the easier it is. You’re you’re giving them the scammer the the copies of the documents. So, what they’re looking for is vacant land transactions, transactions with elderly or deceased owners, transactions with out-of-state owners. And that has to do with detection; the less eyes on a transaction, the easier it is for them to be detected. It all has to do with detection. Why vacant land? Often times vacant land is inherited property, and it’s much less likely to have a mortgage against it. As a closing attorney, when we get a title search in, we’ve got to get a loan payoff for any existing mortgage. Vacant land transactions far less likely to have a mortgage on it, and that are less eyes in the transaction.

For us, for example, when we do a closing, we have to order a loan payoff, where we would need the loan number for the existing loan and the owner’s social security numbers. It’s typically call an 800 number to order the payoff and those are the items we would need to do that. Well, that’s not something a fraudster is going to have readily available, the social security numbers of the actual owners. And so they’re looking for vacant land transactions or elderly owners. You, the REALTOR®, gets contacted– “My mom is 90 years old, she’s got to go into assisted living. I have this power of attorney and we need you to sell the home for her care.” There’s going to be a story that seems reasonable on the surface, and so that’s what they’re looking at, documents held and titled in trusts.

It’s very easy to have AI create fake trust documents where it looks like the fraudster has actual authority to sign for the trust. So, those are the kind of things they’re they’re looking for transactions that would have less people involved, less eyes. And on the purchase side, the fraudster wants a cash deal. They want to tell the REALTOR®, “I need you to find me a cash buyer and we’re going to list this property less than market value because we need a quick sale.”

Well, it it’s counterintuitive to think that a seller is to want going to give up equity that they have in the property just to get a quicker sale. Number one, that should be a red flag to most. And number two, as a practical matter, why should it matter if the buyer is getting a loan on the property? It shouldn’t matter to a seller as long as they’re being made whole at the day of settlement to closing. It didn’t matter that the buyer is getting a loan. So, these little clues need to be picked up on.

I get it, we’re not talking about a multiple offer situation where a cash offer is going to be compared to other offers for a REALTOR® in evaluating multiple offers. We’re talking about the fraudster insisting on “no loan.” “No loan” means no appraisal, which means less eyes on the transaction. So, I again, taken individually these things might not mean much, but cumulatively it should be a red flag out there to the to the REALTOR®.

AS: Do you know of anything that a property owner could do or REALTOR® could to advise property owners to do to protect their land if they own property outright and don’t have that mortgage so that if something were happening on that deed, they could be notified?

RB: We’re we’re seeing more and more fraud registries come online. I live in Shelby County and we have an anti-fraud registry. You go on to your county register’s website, you type in your email address. It took me about 30 seconds to register for it and if anything at all is recorded against my home, I will get instant email notification. That’s really good. Unfortunately, our state is full of counties that aren’t fully online. The the more populous the county, the more likely you are to have a fraud registry, but I would encourage anyone in the big counties, Davidson, Williamson, Shelby, Knox– I would encourage them to find out if there is a property registry, an anti-fraud registry, so that you know.

The the good news also here is that the title insurance industry, the title industry that insures title to properties, have finally acknowledged that this is a serious enough problem where they are offering some coverage that they have never offered before. We’re talking about the enhanced title insurance policy. Tennessee wonderfully has addressed that in our contract where it discusses the option of getting a an enhanced title insurance policy and that new policy contains 19 extra coverage that is not covered by a standard policy.

The foremost and most important is it covers post closing forgeries or fraud. You any new purchaser can get an enhanced policy of owner’s title insurance and have coverage against it. So for the first time the title insurance industry has acknowledged they need to be a part of the solution and it’s a big deal. I–We’ve made the decision in our firm that whenever that policy is available, that is what we will issue. We will only issue an enhanced policy because we want our clients to have the best policy available.

AS: Sure, it’s such a big transaction that you could stand to find yourself  in jeopardy if you were to lose to a fraudster that kind of money that you’ve saved or that you inherited or what have you.

RB: Yeah, and one of the big problems and why this is so attractive to scammers is this type of fraud if someone records a fraudulent deed and sells the property out from under the real owner. It’s a mess and it can take months and months and months to discover if the real owner truly is out of town and and not present at the property and somebody else has moved in. They’re not going to know it for months and months and months. By that time the money is gone, the scammer’s not going to get caught.

There is the real inconvenient truths here in this type of scam. It’s so hard to detect and afterwards it’s a huge lawsuit to figure out how to put everybody in place and unfortunately that ultimate buyer, the buyer that has bought the property and paid good money to the scammer, they’re the ones that are going to be out of luck. They’re a victim in this as well. So, there are a lot of victims in this crime that make it so unfortunate for everyone.

AS: So, random question, but um as you’ve kind of followed this situation, is it people that are overseas that are doing this, that they are the scammers, or you finding that it is actually tracked back to people who are here in the US that are doing the scams?

RB: You know, the– I attend a lot of fraud seminars because this is what I do, this is what I teach, and the the top actors in this are overseas. But it can be anyone. It can– It can be local as well. So, it is, if you’ve got a IP address, this scam can be perpetrated from anywhere. I think more than likely it’s going to be someone from overseas. So, we’ve got to learn to recognize red flags in this type of scam. With who?

RB: And this is where I don’t want to step on any REALTORS®’s toes here, but we have to tell the truth about this. If you get a phone call and you’re the agent and then you’re wanting to list the property, and this individual is not from your sphere of influence or connected to you in any way, in the world that we live in today, that has to be a red flag. You may have the greatest website in the world and a high profile, and that’s wonderful. Been in the business 30 years… but why did that person contact you? You know, that has to be sort of a– If it’s outside the sphere of influence, we have to ask ask why.

When the client when the scammer attempts to control the method of communication, that should be a big red flag. If I’m only going to communicate with you via text message or email, or worse, Snapchat or WhatsApp, that has to register. That is a problem there. “I’m not going to Zoom with you.” “I’m not going to FaceTime with you because I don’t want you recording my face.” These are all red flags that we have to really begin to ask.

And then we also now have to become comfortable with asking for client ID, checking their names via Forewarn. In our closing area now, we have clients that when they come in to close with us, they have to go on our software. I partic– Our office uses Qualia. And so we use something called Qualia Shield, where any buyer or seller has to go, we send them a link to our online secure portal. They have to make copies of the front and back of their driver’s license, and take a selfie. And that is so that the selfie can be compared with the photo on their license to make sure that it is not an AI deepfake photograph of a fake license.

And so we can identify the people just like we’re identifying the property and everything else. So those are the red flags that we have to learn to recognize.

AS: So that leads me into thinking that if you’re looking for the red flags, that perhaps brokers in their offices should have policies that lead the agent into certain things that they should be asking for and and perhaps not communicating certain ways or working with certain uh people if they’re not willing to fill out your form, for example, in your office.

RB: Sure, sure, sure. And we get that. We get pushed back from folks that say, “I’m old. I don’t use technology. I’m not going to do this.” And what we have to do is say, “Great, come into our office. We’ve got a PC up front, we will walk you through the process.” The one thing the scammer is not going to do is show up in person with us. And so again, recognizing the red flags. I think for brokers and from a risk perspective of all of our licensees in the state, attending training, talking about these things, when you get pushed back from clients and explain why you’re having to obtain this information or why it’s having to be done a certain way.

If you’re not a scammer, most people are going to understand and actually appreciate the extra steps that you you are taking to protect their money and their investment. So I think that, you know, that’s going to be a part of this, but these conversations need to be being had in our associations, in our brokers’ offices every day because these scams are evolving. They are changing every day and you got to stay up to speed on it.

AS: Yeah, training is so important because the scams, it feels like we get a new scam constantly. And so if you’re not being trained, there’s no way to keep up with it.

RB: That’s true and I think one thing that that sometimes REALTORS® fail to remember is protecting client information is now a part of their job description.

AS: Right.

RB: When I was a young attorney and I would get a phone call with a problem or a realtor would get a phone call with an issue from their client, it was very easy for the REALTOR® to deflect and say, “Oh, that sounds like a a loan issue or a question, call your loan officer.” Or, “Oh, that sounds like an issue with your title, call your closing attorney.” And it was very easy for the REALTOR® to sort of to field the call and then deflect it away. Under the CFPB now, that’s no longer the case. The REALTOR®– We have a collective responsibility, all of us in the transaction, to protect clients’ private information. So, offices need to have a policy and need to be talking about this stuff every day in their offices.

AS: Right, so important. So important. So, let’s go a little bit past and let’s assume that an agent a broker has a situation where wire fraud has occurred, what should they do the moment that they realize this has happened?

RB: Okay, so wire fraud, even though we started talking about seller impersonation fraud, the bad news is wire fraud has not gone away. I attended a seminar yesterday with a title insurance underwriter and wire fraud losses last year in the state of Tennessee totaled more than $269 million. We are 19th in the– We are 19th nationally and falling for this. We– Our losses jumped 42% from 2024 to 2025. It is a growing problem. We are 17% over the national average. So, if you think that in small-town Tennessee your your REALTOR® and your closing office is not going to be susceptible to this, you’re just wrong.

So, it is growing in scope, it is growing in amount. And unfortunately for the scammers, they say it’s like vodka, it works. This scam still works. So, we’ve got to talk about this, but if you’re sitting in a situation where you and your client feel like they have fallen prey to it, there’s a few things they do.

First and foremost, call their bank. Call their bank and request that the bank send a message to the recipient bank through the SWIFT Federal Reserve system bank-to-bank communication, this is a scam. Freeze the account, requesting a freeze of the account. That’s number one.

There’s also a website you can go to and file a complaint. It is the Internet Computer Crime Center, the IC3.gov; the letter I, the numeral three, dot gov. That is the official federal website to report this. You may also need to call your local authorities, your police department, the white-collar crime division of your local authorities, and file a report because you may need the report just in case there is any insurance coverage on this. The unfortunate reality of it is these scammers, as soon as the money hits the account, they’re breaking that wire down into smaller amounts and trying to get it out of the country.

The average wire fraud scam traverses four banks before it leaves the United States because if there is a transaction where a bank in Nashville is wiring $400,000 to the First National Bank of Moscow or Nigeria, that’s going to raise red flags within the Federal Reserve. So, what they have to do is break down that $400,000 into many smaller amounts, traverse several banks to get it out of the country. So, this is a sophisticated scheme, and the the reality is the money is gone in short order. You do not have days and days to figure it out.

AS: Wow. Yes. So, when you’re talking about the wire fraud, and then we go back to the identification fraud in the deeds, what– Is it the same? Do you contact the same authorities if you find yourself working with somebody who’s had that they’re a victim of that type of fraud?

RB: It would be the same. You also would probably have to contact the title insurance company to see if there is any title coverage and or a lawyer because what’s going to happen in the in the seller impersonation fraud where the transaction goes through and you’ve got a new owner and and an existing mortgage that was legitimate that’s been maybe released improperly. That is all going to have to be unraveled and put back together and the original lender will more than likely be put in their original position and again the buyer is the one out of luck.

So in that case it’s expensive to unravel the the transaction. The wire fraud is just out and out immediate theft. And one thing while we’re talking about wire fraud I hope I’m not going to jump ahead of you but I want to segue into this because of we have a form in Tennessee. We have a wire fraud warning form. I– because I teach this class I see other states forms, I will tell you I think our wire fraud form is the best in the country. Why? Because it tells what the danger is and it leads to a perfect It’s the perfect lead in to a discussion between our REALTORS® and our consumers. It is the way to begin a conversation.

So what I would want all REALTORS® to know is do not have that wire fraud form just be another form that you’re shoving in front of a client with the listing agreement buyer rep agreement and other paperwork. This is a, “Stop, tap the brakes, have a conversation” and use the form itself. It is logical and it will lead to the conversation that needs to be had. Now what fraudsters are looking for they’re looking for low hanging fruit. They want a quick score so they can move on to the next victim.

I also want our REALTORS® to do the following because this will eliminate you from being low hanging fruit.

From here on out for the rest of your career I want you to tell every consumer verbally to them, “You will never receive wiring instructions for me,” okay? If you do that and your client gets a hacked email that looks like it’s coming from you changing the wiring instructions, that’s going to trigger in their head.

First of all, let me just say REALTORS® should not be involved in the wiring of money between the client and us. That is not staying in your lane. Your E&O insurance will not cover you for that and if any REALTOR® is providing wiring instructions for the closing office to their client: Stop. Don’t ever do it again. Stop right now. It’s that important. It’s not your lane and it’s unwanted liability which your E&O insurance specifically excludes it. It is not considered real estate related activity. So, again, stay in your lane.

Let us communicate with your client directly and verbally say to every client, you will never receive wiring instructions from me. You will eliminate yourself from ever having a problem if you do that.

AS: Right. The communication up front is so important for the the consumer to know what to expect like you said and then if they see that that that will let them know that must not be from my REALTOR®. That has– There has to be something wrong and then hopefully pick up the phone and call.

RB: And another sort of red flag, Angela, is a lot of REALTORS® continue to do business on their personal email, a basic Gmail or Yahoo account rather than using the company email that does have some protections in place. And I get the rationale for that. The rationale is if I ever leave this brokerage, I don’t want to lose communication with my clients, so I’m going to continue to use my personal email.

Unfortunately, those are the easiest to hack. They’re filled with bugs and a chain is only as strong as its weakest link and when we’re dealing with wire fraud, the weakest link by far is the REALTOR® email. And if anyone has any question about that, I would encourage you to Google, Bain vs. Platinum Realty. It is the case where the REALTOR® was hacked, wiring instructions were changed, the buyer wired money to a fraudster. And what will happen in all of these cases, the man who lost the sued the brokerage, sued the REALTOR®, sued the closing office, and the REALTOR® was found to be 85% liable on about $200,000 worth of damages.

So, these are cases that are being decided this way all across the country, and that alone should scare us into the realtor not having anything to do with the wiring of funds.

Also, with the CFPB regulations, both your closing office and the lender is required to send emails via an encrypted channel, okay? REALTORS® are not there yet. They’re still sending unencrypted, unprotected emails.

And so, when we send wiring instructions to a client, we not only don’t we send it encrypted, but we purposely leave off the last four numbers of our escrow account, so that the client has to call us, because that’s the one thing that the scammer is not going to be able to do from China or Russia or Nigeria. They’re not going to be able to get on the phone and sound like Wendy in my office and give the last four. So, we we are taking extra precautions there because we need to.

One of the most egregious examples of REALTORS® not protecting folks’ information: if you are a REALTOR® and you’re still making copies of earnest money checks and emailing them to everybody, the other agent, the lender, the closing office and you’re sending it via unencrypted means, you’ve just given a scammer enough information to sell your client’s identity on the dark web.

What does an earnest money check have on it? It has a name, it has an address, maybe a phone number, it has a routing number, and it has an account number. Boom, you that’s enough information to sell someone’s identity. So again, I would encourage those of you who are sending copies of earnest money checks either quit doing it or invest in a Sharpie and at least blacken out the routing and the account number at the bottom of the check. So, that’s something that people can do today to help cut down on fraud.

AS: Wow. So, that’s a this is a lot of information and and the time has just flown by while we’ve um while we’ve talked about this. The last thing that I want to ask is do you see the same mistakes with people texting because it’s not just emails, we also have texting that people use with their communications back and forth.

RB: I do see the same thing. I see– what I see in my practice is an over-reliance of texting. If I could take all the REALTORS® back to real estate school and remind them that due to the statute of frauds, everything we do in our practice has to be in writing and there are no shortcuts. And I see REALTORS® trying to negotiate an entire deal via text message before anyone writes up the contract because they want to save time. That’s not a way to practice real estate properly. The statute of frauds says everything we have to do.

And unfortunately, we have to have a paper trail if the deal does go south and one party wants to sue for a breach of contract, a series of text messages is not it. It’s not going to be considered a writing. So, again, I think that might be a sort of a younger generation thing, but but if you’re a REALTOR® and you believe you’re going to practice your entire real estate career via a telephone, I’ve got bad news for you. It’s not going to happen. You we’ve got to do this in writing. There has to be a paper trail.

And again, texts can be picked up and and scammed. There’s there’s fishing, there’s smishing, there’s smashting, there’s vishing… All of these terms you may have never heard, but it’s all a way for fraudsters to gain control of your telephone as well as your computer. So, thank you for asking that question because it’s all a danger is the is the short answer to that, Angela.

AS: So, my last question, what I’m hearing you say obviously as brokers should look at their policies, agents need to be careful with how they’re receiving information and and providing information. What would be as we wrap up your last piece of advice to everyone listening on on the best thing they can do to protect themselves?

RB: Honestly, I believe that both the real estate title frauds class and the wire fraud class that that we have, training is a must. We need to start talking about this and we need to have a policy in effect so that if someone is scammed, what they’re going to look at in the in these lawsuits is what was the realtor conduct? What did the REALTOR® do or not do? And so, if you’ve got a procedure in place and you’ve advised your clients and you stayed in your lane, there’s not going to be liability there.

So, for any, you know, local associations that want me to come and scare your agents, I’m happy to come do that and teach these courses for CE credit. But talk about it, have training, continue to take classes like this. It is vitally important. These scammers are staying one step ahead and we’ve we’ve got to be vigilant in our practice.

AS: Yeah. Well, Ryan, thank you so much for joining us today. I agree with you, training is a must and scams are going to keep happening and we have to stay on top of them no matter what comes our way. So, again, your class was amazing when we were at conference and I truly do appreciate you sharing and continuing to share the information.

RB: Thank you. I’m happy to do it and thank you for talking with me today.

AS: Absolutely. We hope to see you again soon and again, thank you very much. We appreciate you being here.

RB: You’re welcome. Thanks.

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