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Buyers Beware: Mortgage Closing Scams

Buying a home? Be on the lookout for scams to steal your hard-earned money.

Buying a home--especially your first home--is an incredibly exciting time in one's life. When it comes to closing on your mortgage, it is important to exercise caution so as not to fall prey to scams designed to steal your hard-earned money.

According to an FBI report, Americans lost nearly $150 million to real estate scams in 2018. In fact, scams targeting the real estate industry have increased over 1,100 percent since 2015.

Scammers use a variety of tactics to get rich at your expense. While the rewards of owning a home outweigh the risks of fraud, it's wise to educate yourself about common mortgage scams as you navigate the home-buying process.

Be Aware of Phishing Scams at Closing Time
Mortgage fraud takes many forms, and phishing scams have become increasingly popular. Scammers target real estate professionals to monitor emails and identify clients nearing closing time for the purchase of their new home.

Scammers create phony emails posing as real estate agents, closing officers, or other trusted parties attempting to coax unwitting buyers to redirect their monies into fraudulent accounts by sending last-minute changes to wiring instructions.

When in Doubt, Check it Out
While it's easy to think you would never fall for this kind of scam, these emails can look almost exactly like the real thing. There are steps you can take to avoid falling prey to this crime.

How to Avoid Being Scammed

Before closing on your mortgage, review the process (in person or over the phone) with trusted individuals like your real estate or settlement agent. Be careful about exchanging details about your closing through email. Agreeing to a code phrase (or safe word) only known by involved parties may be an excellent way to confirm their identities in the future.
Keep a record of all parties names and contact information involved in the closing for reference.
Before wiring any money, confirm information with trusted representatives in person or by using the phone number you previously agreed to.
Do not use phone numbers or links sent in an email. Scammers can closely replicate your agent's email address and phone number as part of the phising scam.
Do not email financial information.
Be cautious during phone conversations. Scammers often call and ask you to confirm your personal or financial information. When in doubt, always contact your trusted professionals to confirm whether the request is legitimate.

What to Do If It Happens to You
When it comes to closing on your mortgage, remember the adage that if it seems to good to be true, it probably is.

Reduce your risk of fraud by remaining aware of the latest phishing scams, working with people you trust, and seeking advice from official government resources when you think something seems "phisy." While you can't completely eliminate the risk of fraud when buying a house, vigilance goes a long way toward protecting your hard-earned money.

If you suspect you are a victim of this crime:

Contact your bank or wire-transfer company immediately. Ask for a wire recall. By reporting the issue immediately, you can increase the likelihood that you'll be able to recover your money.
Call your local police department.
Call your lawyer.
Change your name and user password on all financial sites.
File a complaint with the FBI by contacting the FBI's Internet Crime Complaint Center.

Closing on a new home can be one of your most memorable life moments. Take the right steps to ensure your home-buying memories are happy ones.

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Buyers Beware: Mortgage Closing Scams

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