Tips to Prevent Mortgage Wire Transfer Fraud

April 15, 2024

by Christian Phillips

Purchasing a home can be a stressful experience, and if you're not careful, you could fall victim to mortgage wire transfer fraud. This article will define mortgage wire transfer fraud and offer ways to protect your closing funds.

What is wire transfer fraud in real estate?
Mortgage wire fraud occurs when scammers pose as your real estate agent or title company and use phishing techniques to divert your closing costs to a fraudulent account.

Phishing is when a scammer uses fake emails, phone numbers, or websites to impersonate a credible source.

Consumers fall victim to these attempts because scammers obtain personal information only trusted individuals would have.

Identifying Phishing Emails:
Identifying phishing emails can be easy if the recipient pays attention to inconsistencies in the email address. However, consumers often overlook certain determining factors. Scammers aim to trick you into acting impulsively, so they use eye-catching subject lines to grab your attention. For example, “URGENT “: New Instructions Regarding Closing Funds!”

When you receive a scam email, the scammer usually tries to divert your attention away from their email address. They do this by providing a link they want you to click immediately in the email. Most people who fall for the scam will open the email, quickly scan the text, and click on the first link the scammer provides. So, it's essential to be cautious and not act impulsively when you receive suspicious emails.

What will the email include?
Suspicious emails will try to deceive you by claiming that the process of submitting your closing funds has changed due to an error. They may instruct you not to bring a check and instead wire the money directly to your lender. While this may seem convenient, remember that scammers often try to get you to act out of impulse. They may use high-pressure tactics, such as claiming that you could potentially lose the home if you don't act quickly. Unfortunately, if you follow their instructions without thinking clearly, you may fall victim to the scam and lose your hard-earned money.

Spoofing calls, texts, and emails:
Spoofing occurs when a scammer uses a software program to mimic a person or organization's legitimate phone number. When the scammer calls or texts you, the phone number will appear to be from a trusted source, such as your realtor or lender. This can make distinguishing between a legitimate and a fraudulent call or message difficult.

scammers often say, "I am calling on behalf of XYZ," to make their call seem legitimate. When you see a legitimate-looking caller ID, you might not question the caller's legitimacy. But just like phishing emails, scammers can trick you into following their instructions and wiring money to a fraudulent account.

Be apprehensive of last-minute changes:
Don't let scammers rush you into making a decision. They use urgency to manipulate you.

Know your closing process. Before your money is due, discuss the closing process with your real estate agent in person.
Avoid exchanging information with people via email, and perhaps establish an over-the-phone password that trusted parties can use to confirm their identity.
- Financial information should never be sent via email. If your email account is compromised, scammers can use this information in the future.
Write down contact information: To ensure you have the correct contact information, document each party’s name, number, email, and other contact details.

When in doubt, call to confirm changes through a trusted channel: Even with the slightest doubt of legitimacy, don’t answer emails, texts, or provide information via phone. Stop all communication and reference your list of trusted contact information. With the ability to spoof phone numbers, punch the number manually to avoid accidentally clicking on the recent call you just received.

What to do if you’ve been scammed:
Contact your bank or wire service to report a fraudulent wire transfer. If caught early enough, you may request a wire recall, and in some cases, the money can be returned.

File a complaint with the FBI. Include as much detailed information as you can to help them potentially recover your funds. Submit a report.

Tips to Prevent Mortgage Wire Transfer Fraud

Related Posts

Tips to Prevent Mortgage Wire Transfer Fraud

Am I Ready to be a Homeowner?

Three Common Down Payment Misconceptions When Buying a Home

How to Lower Interest Rates