If you’re in the market for a new home this year, it’s more important than ever to watch out for so called “phishing” scams. These information gathering scams target homebuyers who are nearing the closing date on their mortgage loans. Fraudsters attempt to steal the homebuyer’s closing funds, such as their down payment or closing costs, by sending the homebuyer an email posing as the homebuyer’s real estate agent or settlement agent (title company, escrow officer, or attorney). The email falsely claims there has been a last minute change in the closing process, usually a change in the wiring instructions. It instructs the homebuyer to wire or otherwise electronically transmit the closing funds to an account that looks legitimate, but that the scammers control.
The FTC has compiled a list of important “must know” facts that home buyers should be aware of before they get to the close stages of home buying.
- Discuss the closing process and money transfer protocols with your real estate or settlement agent. Don’t be afraid to ask questions, or clarify instructions at any point along the way, even if you feel like you are repeating yourself by asking.
- If you receive an email requesting that you send money in connection with closing, even if it’s from a familiar source, stop immediately. Call your realtor or title professional to discuss the email. Don’t use phone numbers or links in the email, call the number you have been using since the outset of the process.
- Never email sensitive, personal baking information such as account numbers. Email is not a secure way to send financial information.
- Be cautious about opening any attachments or downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security.
- Before sending any wire transfer, verify wiring instructions with your bank and your closing professionals. Ask all parties to look for potential red flags, including discrepancies between the account name and the name of the intended beneficiary (i.e., your real estate or settlement agent). Your bank may also be able to compare the receiving account number to account numbers identified in past consumer complaints as the destination of fraudulent transactions.
- Confirm receipt of the wire transfer by your settlement agent a few hours after the wire was transmitted. If you or another entity involved in the closing suspect a problem, report it to law enforcement and your bank immediately, as this will increase your likelihood of recovering the money.
Experts agree that one of the best defenses against mortgage wire fraud is to use an established title company for closing and have open lines of communication with them. At Setco Services, we pride ourselves on staying up to date on all the latest technology, so we can be aware of ways it can be exploited before it’s too late. Our title professionals are always happy to answer questions and provide side by side support through every step of the process so your money gets where it’s supposed to, and you get into your new home. Please click below to contact your local Setco office, find out what we can do for you!