How to Spot and Stop Mortgage Wire Fraud
It's a situation that happens all too often. An individual, couple or family finally finds the home of their dreams. Then, after a back-and-forth negotiation between agents, a price is agreed upon, and they move forward with the transaction. But something strange and unsuspecting happens during the closing process – the buyer becomes a victim of mortgage wire fraud.
What is Mortgage Wire Fraud?
Mortgage wire fraud is a severe cybercrime in which hackers pose as real estate agents, mortgage professionals or closing agents to steal money from unsuspecting victims. They do so with fake emails, websites and phone numbers that look and seem authentic but are convincing impersonations of people on the homebuyer’s team.
By conducting extensive research online, hackers can find a lengthy list of information about the homebuyer, such as their address, telephone number, email address and other details about the purchase. The cyber thieves will then contact the homebuyer during the closing process via telephone or email with instructions to wire money to a fake account. The hackers typically close the account after stealing the funds and disappear with the money.
When the hackers are successful, the homebuyers lose their closing funds and must spend extra time and resources trying to resolve the issue. This puts a damper on the excitement of purchasing a home and causes undue stress and financial worry.
How to Identify Mortgage Wire Fraud
As the digital landscape evolves, cybercriminals become more sophisticated in their mortgage wire fraud tactics. This makes it difficult for soon-to-be and existing homeowners to protect themselves. To best safeguard yourself from mortgage wire fraud, knowing how to spot a scam is essential. Here are some things to watch out for:
- Suspicious Emails: If you receive an email with an urgent subject line, err on the side of caution. Look at the email sender's address to determine if it's fake. Fraudsters often add extra letters to email addresses to make them appear legitimate.
- Unusual Phone Calls: If you receive a call from someone claiming to be a lender, mortgage consultant or escrow manager, verify the caller. Do not hesitate to ask as many questions as needed. If you don't get answers to your questions or the caller sounds suspicious, hang up and block the number.
Keep Your Mortgage Documents and Contacts Organized
Each step of the home loan process involves a lot of time, effort and, of course, paperwork. Once you meet the bank or lender's loan conditions and are fully approved, the closing process begins. This is the final step in the home loan process, which can be hectic and stressful because many tasks, including sizeable money transfers, will happen quickly.
Cyber thieves know this and attempt mortgage wire fraud during the closing process. They know you are very busy and possibly susceptible to one of their scams.
In addition to staying vigilant if you receive suspicious emails and telephone calls, you should become familiar with your loan documents and paperwork and keep them organized. Consider creating a contact list of the individuals involved in your transaction, such as your bank or lender, real estate agent and settlement agent.
Understanding your mortgage and closing process and wiring instructions can help you quickly identify suspected scammers who contact you via email or phone. Their contact information and wire transfer requests might not match those in your records.
Think You've Been Scammed? Here's What to Do.
Hopefully, you will never become a victim of mortgage wire fraud. But, if you think you've been scammed, taking immediate action is vital. First, contact your bank, lender or wire service and report the scam. Tell them you might have wired money to a suspicious party and ask them to recall the transaction as soon as possible.
The faster you move, the greater the likelihood that you can get your money back. You should also contact the FBI's Internet Crime Complaint Center and submit a report. You can search online for an FBI office near you.
Don't assume that you will never be subjected to bogus emails or phone calls from fraudsters during your homebuying process. It can happen to any homebuyer, anytime.
In addition to following the steps above, always confirm instructions with your closing agent in person or by using the contact's name, telephone number and email you agreed to and can verify as legitimate.
Finally, avoid sharing personal and financial information in email communications, as experienced hackers can access your inbox.
Published June 2023
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.