Mortgage Wire Fraud: Protecting Yourself from Real Estate Scams

Introduction

In today's world, where technology has made transactions faster and more convenient, it has also opened up opportunities for criminals to commit fraud. One such form of fraud is mortgage wire fraud, a type of real estate scam that can cost unsuspecting homeowners millions of dollars. In this blog, we will explore what mortgage wire fraud is, how it works, and most importantly, how you can protect yourself from falling victim to this devastating scam.

What is Mortgage Wire Fraud?

Mortgage wire fraud is a form of real estate fraud where criminals attempt to deceive victims into sending their down payment or closing costs to the wrong recipient. According to the FBI's 2021 report, homeowners lost over 350 million dollars due to real estate fraud. This alarming statistic emphasizes the need for individuals to be vigilant and take steps to protect themselves.

How Does Mortgage Wire Fraud Work?

Scammers meticulously research potential victims and monitor their real estate transactions. They strike when victims are close to finalizing the deal. The scammers create emails that look legitimate, often with just one character off in the email address, to trick the victims into believing they are receiving instructions from a trusted source.

The subject lines of these emails are carefully crafted to instill a sense of urgency and importance. Phrases like "Urgent: Instructions for Closing Funds" or "New Wire Transfer Directions - Confirm ASAP" grab the attention of unsuspecting victims. Inside the email, the scammers provide detailed instructions on how and where to wire the money.

Since wiring money is difficult to cancel once sent, scammers prefer this method of payment. They will provide the victims with the wrong account details, directing the funds to their own accounts. By the time the victims realize they have been scammed, it is often too late to recover their money.

Protecting Yourself from Mortgage Wire Fraud

While mortgage wire fraud can be devastating, there are steps you can take to protect yourself:

1. Be cautious of last-minute changes: Scammers often make last-minute changes to the closing process. If you receive any unexpected requests or instructions, proceed with caution.
2. Speak directly with your real estate agent: Always verify any changes or instructions by speaking directly with your real estate agent, loan officer, or title officer. Do not solely rely on email communication.
3. Confirm transaction details: Before making any wire transfers, double-check all transaction details, including the recipient's account information. A simple phone call can save you from falling victim to fraud.
4. Set up passwords: Establish a password with your real estate agent, escrow, title, and lender. This additional layer of security can help prevent unauthorized changes to your transaction.
5. Understand the closing process: Educate yourself about the closing process and familiarize yourself with common practices. This knowledge will help you spot any suspicious activity.
6. Avoid discussing finances via email: Be cautious when discussing financial matters via email. Scammers can intercept these conversations and use the information to their advantage.

If you believe you have been a victim of mortgage wire fraud, take immediate action:

1. Request a wire recall: Contact your bank and request a wire recall. Time is of the essence, so act quickly.
2. File a complaint with the FBI: Report the incident to the FBI's Internet Crime Complaint Center (IC3). They specialize in handling cybercrimes.
3. File a police report: Contact your local law enforcement agency and file a police report. This will help create a record of the incident.

It's important to note that the statute of limitations for wire fraud is 10 years, and those convicted can face up to 20 years in federal prison and fines of up to two hundred and fifty thousand dollars. By taking swift action, you can not only protect yourself but also assist in bringing these criminals to justice.

Conclusion

Mortgage wire fraud is a serious threat to homeowners, but by staying vigilant and following the necessary precautions, you can minimize the risk of falling victim to this scam. Remember to be wary of unexpected changes, verify instructions with trusted sources, and avoid discussing sensitive financial information via email. If you suspect you have been scammed, act immediately by requesting a wire recall, filing a complaint with the FBI, and reporting the incident to your local police. Stay safe and protect your hard-earned money.

Thank you for reading. If you have any questions or concerns, don't hesitate to reach out. Have a great day!

Sincerely, Andres Morales