How To Beware Of Mortgage Wire Fraud During Closing

A new breed of scammers is taking advantage of homeowners during the stressful closing period. And if you aren’t careful, you too could lose your closing fund.

In this article, we’ll cover information about mortgage closing scams. We’ll show you how scammers take advantage of homeowners and how you can protect your closing funds. Finally, we’ll provide you with a few resources you can use if you’re the victim of a mortgage scam.

What Is Wire Fraud In Real Estate?

How Does Wire Fraud Work?

What Can I Use To Identify Fraud And Avoid It?

Watch out for these red flags to prevent mortgage wire fraud.

Know Your Closing Process

Understanding your closing process before your money is due can help you avoid scams. Speak with your real estate agent in person or over the phone and discuss how you’ll complete the closing process.

Ask about valid payment methods and talk with your lender directly about how you should wire money. You may want to use this opportunity to set up a password that trusted parties can use to confirm their identity when communicating.

Be very hesitant to discuss the closing process via email. Phishers can use this information later to pose as someone you trust.

Write Down Contact Information

You should have a couple of contact methods for everyone involved in your closing transaction. This includes your lender, your real estate agent, your attorney and your settlement agent. Write down each party’s name, phone number, email address and any other form of contact information you have.

You can also use the Consumer Financial Protection Bureau’s Mortgage Closing Checklist to store this information. Don’t email your completed checklist or any outside contact information to anyone.

Beware Of Last-Minute Closing Changes

Scammers cause confusion and panic to convince you to go against your better judgment and wire money to an undisclosed party. Be wary of anyone who urges you to act fast or send money immediately, especially if the request comes over email.

Call To Confirm Any Wiring Instructions

Don’t follow up on any emails with wiring instructions, even if the letter looks legitimate. Contact a trusted representative either in person or over the phone and ask them to confirm the account number and name. Your lender should be able to repeat the name on the account, the amount due and the account number over the phone without prompting.

Only use phone numbers you know and trust. Don’t use phone numbers contained only in the email. Scammers can spoof numbers and create fake phone numbers.

Never Email Your Financial Information

Email is never a safe way to transmit your financial information. Phishers can use this information against you later after a hack, even if you’re emailing someone you trust. Stick to in-person meetings or phone conversations to share important information.

Be Wary Of Phone Conversations

Thanks to spoofing, it can be difficult to distinguish whether a phone call is a scam or legitimate. A scammer might call you and tell you that they have information for you but they need to confirm your identity first.

Trust your gut. If something doesn’t feel right, hang up the phone and contact one of your trusted parties on a phone number you know. They’ll be able to confirm specific wiring instructions or any legitimate changes to the closing process.

Action To Take If You Believe You’ve Been Scammed

Take a deep breath and follow these steps if you think you’re the victim of mortgage wire fraud.

Contact Your Bank Or Wire Transfer Company Immediately

Contact your bank or wire service if you have any inkling that you’re not sending money to a trusted party. Request a wire recall as soon as possible after you make the transaction. In some cases, you may be able to get the money back that you sent – but only if you act fast.

Report the error quickly and explain what you think is going on to increase your chances of getting your money back.

File A Complaint With The FBI

The FBI has an internet crime division that might be able to help you if you’re a victim of fraud. You can contact the FBI’s Internet Crime Complaint Center and submit a report. The more information you include in your report, the more likely the FBI will be able to help you.

The Bottom Line

Mortgage wire fraud is a serious issue that can put your closing costs at risk. Scammers use techniques like phishing and spoofing to convince you via email or phone that you’re communicating with a trusted agent or lender. The scammer then tells you that there’s been a change in closing procedures and that you must wire money to a new account. In actuality, the account belongs to the scammer. Once you send the money, it’s very difficult to get it back.

There are a few ways you can protect yourself from scammers. Make sure to confirm your closing details in person and collect legitimate contact information. Avoid sharing sensitive details over email and be wary of attempts to get you to send money quickly. Contact your bank or wire company and request a wire recall if you think you’re the victim of a scam. You should also submit a complaint with IRS Criminal Investigation.

Armed with this knowledge, apply for a loan today with Rocket Mortgage^®. Should you encounter a scammer along the way, you’ll be ready for them.