Thinking about Buying a House? Watch Out for Mortgage Closing Scams Targeting Home Buyers
Scammers are trying to steal buyers’ closing money--don't become the next victim!
Are you one of the many thinking about buying a house this summer? If so, make sure you don't fall for a mortgage closing scam!
Stealing Closing Money
Scammers are targeting buyers close to the closing date on their mortgage. They try to steal the buyer's closing money, such as their down payment and closing costs, by sending the buyer an email in which they pretend to be either the buyer's real estate agent or settlement agent, such as the title company, escrow officer, or attorney. They make false claims such as a last-minute change in the closing process, a check that is no longer acceptable, or a change in the wiring instructions. They tell the buyer to electronically transmit the money to an account in their control.
Be very careful if you're in the market for a new house. Follow the tips below to help protect yourself from the scams and to take action if you become a victim.
How to Avoid Email Phishing Mortgage Closing Scams
If you've been watching or reading the news recently, you've probably heard of a practice known as "phishing." This is what it's called when an internet scammer pretends to be a business in an attempt to trick you into providing your personal information.
To avoid getting taken advantage of, follow these tips:
- Talk about the closing process and protocols for transferring funds with your real estate or settlement agent. Don't move forward in the process until you understand everything completely.
- If you get an email asking you to send money in connection with a closing, don't do it, even if you recognize the sender. Call your real estate or settlement agent and ask about it. If there are phone numbers or links in the email, do not use them.
- Don't email financial information; email isn't secure enough for this use.
- Be wary if any emails come with attachments, even if they appear to be sent from someone you know. Their account may have been hacked, and the attachments could contain malware that will weaken your device's security.
- Before you send a wire transfer, ask your financial institution for help in identifying any red flags in the wiring instructions, such as possible differences between the name of the account and that of the intended beneficiary of the funds. Your bank might also be able to compare the number of the receiving account to numbers that have been identified in past complaints as the destination of fraudulent transactions.
- After you send the wire transfer, confirm that your real estate or settlement agent received it a few hours after it was sent. If you or they suspect any problems, report the transaction to law enforcement and your financial institution as soon as possible. This will make it more likely that you'll get your money back.