It seems that every time we turn around there is a new scam aimed at taking advantage of vulnerable consumers. Scammers have found a new way to exploit homeowners during the nerve-wracking closing period of the home buying process. Learn how scammers are taking advantage of home buyers and sellers, how you can avoid becoming a victim, and what you should do if you find yourself a tragic casualty of mortgage wire fraud. 

What is Mortgage Wire Fraud?

Mortgage wire fraud is where a hacker poses as your real estate or title agent. Generally, they will convince you to transfer your closing costs into a fraudulent account. The emails will look authentic, even having the company’s logo and come from an email that seems legitimate. When calling their targets, scammers can duplicate your agent’s phone number making you feel comfortable following any instructions they give. 

How Does Mortgage Wire Fraud Happen?

This type of fraud relies solely on phishing. Phishing is a hacking technique where a hacker poses as a legitimate company and contacts their targets typically through emails or phone calls. 

Cybercriminals have various ways to hack into systems and gain sensitive and confidential information. But, how do they do it? When it comes to real estate fraud, a hacker first gains access to a real estate or title agent’s email account. Patiently, the fraudster reads through emails until finding one that discusses a transaction, usually the closing date. Then, they collect all pertinent information regarding the transaction such as the name of the parties, the closing date, and the closing amount. The con artist then simply creates an email address so similar to the real estate or title agent’s address that most clients won’t even notice. Generally, these emails are missing one letter or add one letter to the agent’s true email address. Note that it is extremely rare that an agent will use an unsecured email such as Gmail to send a wire request. Subsequently, the cyber thief sends an email out to an unsuspecting buyer, giving them wire instructions for their down payment. 

These fraudulent emails or phone calls generally come at the very last minute, informing the buyer about changes in how the down payment will be received. The change will be a different account. Usually, these con artists will urge the victim to send the money as soon as possible. 

How to Avoid Becoming a Victim of Mortgage Wire Fraud

There is nothing you can do about scammers hacking into other systems and stealing your private information. You can, however, take steps to minimize the chance of a hacker breaking into your system and be aware of potential threats to your private information.  

Secure Your Accounts 

By securing your computer and wireless phone you will be less likely to fall victim to cybercrime. Never click on any unknown attachments or links. By clicking on these links and attachments you can unknowingly download malware. Malware is malicious software variants which include viruses and spyware designed by hackers to gain unauthorized access to networks. As annoying as it can be, do not use the same password for all your accounts. By using the same password you are allowing con artists to easily gain access to all your accounts versus just one. Be sure to use complicated passwords that consist of capital and lower case letters, symbols, and numbers. Whenever possible use two-factor authentication. It is much harder for cyber thieves to gain access this way. Last, but not least, never conduct business over public, unsecured Wi-Fi. 

Be Skeptical of Any Change to Wiring Instructions on Fridays

If you receive any changes of instructions on a Friday or the day before a holiday for wiring funds be wary. Alterations to wiring instructions will only come from your closing agent. Because it typically takes 72 hours to complete a wire transfer, crooks will often send emails or call with a request for wire changes late in the afternoon on a Friday or preceding a holiday. Once these funds are wired to a fraudulent account there is little your financial institution can do to recoup your money. 

Call Your Agent

Although email is quick and convenient when it comes to protecting your money take the extra time to pick up the phone and call your agent. If you receive any emails with instructions about wiring funds that were not discussed prior to receiving the email call and confirm before transferring any money. 

Steps to Take If You Are the Victim of Mortgage Wire Fraud

If you become an unfortunate victim of wire fraud immediately contact your financial institution and request they promptly contact the financial institution the funds were sent. Contact your local FBI office. The FBI may be able to track the fraudulent transfer down and freeze it. You will also need to file a claim with the FBI.   

Homebuyers have recently become increasingly targeted by cybercriminals. These con artists are always on the lookout for vulnerable prey, and who is more vulnerable than an anxious homebuyer in the middle of closing a deal? Be sure to take steps to minimize your chances of falling prey to this unfortunate scam. 

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Khalil El-Ghoul

Discover our 2.25% Full Service Listings and Buyer Rebates. Khalil is dedicated to guiding home buyers and sellers with expert advice and objective information. For professional real estate assistance, text Khalil at 571-235-4821 or email khalil@glasshousere.com today.