How to Avoid Mortgage Wire Fraud
Published on January 22, 2024 | 3 Minute read
Melanie
Ortiz Reyes
Content Specialist
Closing on a new home is an exciting milestone, but it's crucial to remain vigilant against potential threats, particularly mortgage wire fraud.
Mortgage wire fraud is a sophisticated form of cybercrime that specifically targets individuals involved in real estate transactions, particularly during the closing process of a mortgage. In this type of fraud, criminals utilize deceptive tactics to trick homebuyers, sellers, real estate agents, or other parties into wiring large sums of money to fraudulent bank accounts. The primary goal is to divert funds intended for legitimate real estate transactions into accounts controlled by the fraudsters.
Types of Wire Fraud
- Business Email Compromise (BEC) - Hackers gain access to a party's email account and use it to request wire transfers, often posing as a real estate agent, title company, or lender.
- Phishing Attacks - Cybercriminals send deceptive emails, messages, or even create fake websites to trick individuals into revealing sensitive information or wiring funds to fraudulent accounts.
- Change in Payment Instructions - Fraudsters may intercept legitimate communication between parties, altering payment instructions at the last minute to redirect funds to their accounts.
How to Avoid Mortgage Wire Fraud
- Secure Communication Channels - Establish encrypted communication channels with your lender, title company, and real estate professionals to ensure that sensitive information remains confidential.
- Multi-Factor Authentication - Enable multi-factor authentication on all accounts involved in the transaction to add an additional layer of security against unauthorized access.
- Independently Verify Information - Independently verify contact information for all parties involved, especially before sharing sensitive information or initiating fund transfers.
- Confirm Details Directly - In case of any doubts or changes in instructions, confirm details directly with trusted contacts using previously established communication methods.
- Financial Transactions on Secure Networks - Conduct all financial transactions related to the closing process only on secure and encrypted networks to prevent unauthorized access.
- Avoid Public Wi-Fi - Refrain from using public Wi-Fi for any activities related to the closing process to mitigate the risk of unauthorized interception of sensitive information.
- Direct Verification - Verify all account information directly with your lender or title company via a verified phone number before transferring any funds.
- Beware of Changes - Exercise caution and independently verify any last-minute changes to wiring instructions to ensure the legitimacy of such alterations.
- Research and Reviews - Research and select lenders, title companies, and real estate professionals with a proven track record of security and reliability. Read reviews and seek recommendations from trusted sources.
- Established Reputations - Choose professionals with established reputations in the industry to minimize the risk of partnering with entities susceptible to cyber threats.
Warning Signs
If you observe any of these warning signs, it's crucial to independently verify the information with trusted contacts using previously established communication methods. Being vigilant and proactive can help you prevent falling victim to mortgage wire fraud during a real estate transaction.
- Unexpected changes in wiring instructions
- Unusual email addresses or domains
- Poorly written communications
- Mismatched signatures
- Pressure to act quickly
Protecting your investment from the threat of mortgage wire fraud demands a combination of awareness, diligence, and proactive measures. Stay informed, stay vigilant, and ensure that your journey into homeownership remains secure from potential cyber threats.