Mortgage

Wire Fraud is on the Rise. Here Are Some Tips to Avoid It!

June 23, 2022

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Wire Fraud is on the Rise. Here Are Some Tips to Avoid It!

Buying a home takes a lot of time and effort. The last thing you want, after you’ve saved all of that money, found the right real estate agent and mortgage broker, navigated the housing market, and had an offer accepted, is for it all to disappear in the blink of an eye. 

Mortgage wire fraud is on the rise and has cost its victims unbelievable, life-changing sums of money. In 2020, 1/3rd of all transactions included targeted wire fraud scams. According to the FBI, victims of email account compromise lost $2.39 billion in 2021. At UMortgage, we take wire fraud very seriously and have set up proactive precautions to protect our clients from falling victim. In this blog, we’ll explain exactly what wire fraud is and the ways you can avoid it.

What is Wire Fraud?

Mortgage wire fraud is a cybercrime that involves fraudsters posing as real estate agents, escrow agents, loan officers, or title companies and reaching out with ‘new wire transfer instructions’ using phishing techniques like fake emails, phone numbers, or websites. 

The goal of these techniques is to get your down payment or closing costs into a fraudulent account owned by the scammer. They dupe homebuyers and homeowners receiving a refinance by telling them that there have been last-minute changes or that the funds need to be dispersed immediately. 

These strategies, unfortunately, work by taking advantage of stressed buyers who don’t want to lose their home in the late stages of the closing process. And although wire fraud is more common than you may want to believe, it is also avoidable by following a few simple steps which we’ll detail below. 

Be Wary of Cyber Attacks

When it comes to transferring large sums of money, you can never be too safe. When you receive wiring instructions, pay attention to how they’re sent. It’s best to only accept instructions that are secure and encrypted.

Scammers also love to disguise themselves as people you trust by using free, web-based email accounts. If you feel suspicious about any instructions you received, it’s always a good idea to confirm over the phone with a team member of your title company. 

If you’ve been asked for personal financial info over the phone, ask the caller for a name, job title, and phone number. Cross-check that information against the contact information you have from official documents from your title company, mortgage broker, and real estate agent before taking any next steps. 

Pick Up the Phone to Confirm Wiring Instructions

For the most part, wiring instructions rarely change. If you receive an email saying that any of your wiring instructions have changed, pick up the phone and use a number that you’ve previously used to call your real estate agent or title company to confirm before initiating a wire transfer. 

It’s also important, before sending any funds, to call your bank and have them confirm the account number and name on the account before sending a wire. Once you’ve initiated the transfer of funds, verify immediately and call your title company or real estate agent to confirm your funds were received. The sooner you can find out that you’re a victim of wire fraud, the more likely it is that you’ll have your funds returned. If not, that money could be lost forever. 

Understand Your Closing Process

Knowledge is power, and having a firm grasp on your closing process can help you avoid falling for phishing schemes. One of our mottos at UMortgage is ‘Relationships Not Transactions’, meaning that we put your needs over profits every day. If you have any questions about your mortgage process, all you have to do is ask! At the end of the day, an educated buyer is a strong buyer.

If you’re interested in starting a safe and streamlined homebuying process, get in touch with one of our Loan Originators! We’re licensed in all 48 continental states, and we’d love to get you into your dream home. 

What Do You Do If You Think You’re a Victim of Wire Fraud?

If you think you might have fallen victim to a wire fraud scheme, immediately notify all of the financial institutions and escrow agents involved in your transaction and request a wire recall. Your bank might be able to stop the funds from being transferred. You should also contact the FBI’s Internet Crime Complaint Center, and call your local law enforcement authorities. It’s never a guarantee, but the sooner you contact these institutions after sending the funds, the more likely you are to retain that money.

Mortgage wire fraud is a serious issue affecting thousands of homebuyers every year. Make sure to follow these simple steps to avoid falling into the trap and losing the funds that you worked so hard to save.

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