John Gear Law Office & Salem Consumer Law    503-569-7777
  • Welcome
  • Services Offered
  • Finding My Office
  • Law for Real People blog
  • Useful links

If you are buying property -- spotting mortgage closing scams

6/24/2019

0 Comments

 
Mortgage Closing Scams: How to protect yourself and your closing funds
By Melissa Yu – JUN 03, 2019

Your Mortgage Closing Checklist
Closing is one of the most important stages of buying a house. Learn how to prepare and what to expect so you can close with confidence. 
  • Download our Closing Checklist

Closing on a new home can be one of your most memorable life moments. It’s the final and one of the most critical stages in the home-buying journey, but with the exchange of key paperwork and a sizable down payment, it can also be a stressful experience, especially for first-time homebuyers.  


The FBI has reported that scammers are increasingly taking advantage of homebuyers during the closing process. Through a sophisticated phishing scam, they attempt to divert your closing costs and down payment into a fraudulent account by confirming or suggesting last-minute changes to your wiring instructions. In fact, reports of these attempts have risen 1,100 percent between 2015 and 2017, and in 2017 alone, there was an estimated loss of nearly $1 billion in real estate transaction costs. 


While it’s easy to think you may not fall for this kind of scam, these schemes are complex and often appear as legitimate conversations with your real estate or settlement agent. The ultimate cost to victims could be the loss of their life savings. 

Here’s what you should know and how to avoid it happening to you.


How it works

Scammers are increasingly targeting real estate professionals, seeking to comprise their email in order to monitor email correspondences with clients and identify upcoming real estate transactions. During the closing process, scammers send spoofed emails to homebuyers – posing as the real estate agent, settlement agent, legal representative or another trusted individuals – with false instructions for wiring closing funds.

How to avoid a mortgage phishing scam

  • Identify two trusted individuals to confirm the closing process and payment instructions. Ahead of your mortgage closing, discuss in person, or by phone, the closing process and money transfer protocols with these trusted individuals (realtor, settlement agent, etc.). Be cautious about exchanging any details about your closing over email. You may want to use this opportunity to also create a code phrase, known only by these trusted parties, if you need a secure way to confirm their identities in the future. 

  • Write down their names and contact information. Use the Bureau’s Mortgage Closing Checklist (available for download below this post) to list these individuals and their primary phone numbers.

  • Before wiring money, always confirm instructions with your trusted representatives. Never follow instructions contained in an email. Verify the closing instructions, including the account name and number, with your trusted representatives either in person or by using the phone number you previously agreed to.

  • Avoid using phone numbers or links in an email. Again, scammers can closely replicate the email address, phone number and format of an exchange from your agents. Avoid clicking on any links or downloading attachments without first confirming with your trusted representatives.

  • Do NOT email financial information. Email is never a secure way to send financial information. 

  • Be mindful of phone conversations. It may be difficult to identify whether a phone call is fraudulent or legitimate. Scammers may call and ask you to verify your personal or financial information. When in doubt, always refer back to your trusted professionals to confirm whether it’s legitimate. 

What to do if it happens to you
  • Contact your bank or wire-transfer company immediately. Ask for a wire recall. Reporting the error as soon as possible can increase the likelihood that you’ll be able to recover your money.

  • File a complaint with the FBI. Contact the FBI’s Internet Crime Complaint Center at www.ic3.gov

While it can be easy to think you’ll never fall for a scam of this nature, the reality is that it’s becoming more and more common, and the results can be disastrous for eager homeowners. By being mindful and taking a few important steps ahead of your closing, you can protect yourself and your loved ones.

To learn more about the closing process, including how to prepare for your closing and common pitfalls to avoid, check out our Mortgage Closing Checklist. For information and resources for the each stage of the home-buying journey, visit the Bureau’s Buying a House tool. 


The resources on mortgage closing scams are part of the Consumer Financial Protection Bureau’s work to protect consumers from unfair, deceptive, or abusive practices. We arm people with the information, steps, and tools that they need to make smart financial decisions.

cfpb_buying-a-house_mortgage-closing_checklist.pdf
File Size: 213 kb
File Type: pdf
Download File

Enter your Email:
Preview | Powered by FeedBlitz
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    RSS Feed

    Author

    John Gear Law Office -
    Since 2010, a values-based Oregon law practice serving Oregon consumers, elders, employees, and nonprofits.

    Categories

    All
    Advertising
    All
    Arbitration
    Autofraud
    Bankruptcy
    Borrowing
    Class Actions
    Consumer Law
    Consumer Protection
    Consumer Protection Class Actions
    Credit
    Credit Reports
    Debt
    Debt Collection
    Elder Abuse
    Elders
    Employment
    End Of Life
    Fairness
    Fdcpa
    Foreclosures
    Fundraising
    Funeral
    Games Car Dealers Play
    Garnishments
    Great Stuff
    Health Care/Insurance
    Identity Theft
    I (heart) Liz Warren
    Insurance
    Lawyer Referral Service
    Legal Resources
    Lemon Law
    Life Planning
    Long-term Care Facilities
    Media
    Military
    Military Assistance Panel
    Modifications
    Mortgages
    N.A.O.
    Nonprofits
    Oregonadminrules
    OregonLaws.org
    Plain English
    Preparing For Departure
    Privacy
    Pro Bono
    Regulation
    Resources
    Right To Repair
    Safety
    Scam
    Scams
    Strategic Planning
    Student Loans
    Tort Reform
    Training
    Used Cars
    Veterans
    Wage Garnishment
    Wage Theft
    Warnings
    Warranties
    Watchdogs
    Workplace

    Archives

    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    April 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    April 2020
    March 2020
    February 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011

    RSS Feed

Picture

Lawyerly Fine Print:

John Gear Law Office LLC and Salem Consumer Law.  John Gear Law Office is in Suite 208B of the Security Building in downtown Salem at 161 High St. SE. That is right across High Street from the Elsinore Theater, a half-block south of Marion County Courthouse.

John Gear is only licensed to practice law in Oregon. This site may be considered advertising under Oregon State Bar rules. There is no legal advice on this site so do not take anything you read here as advice for your particular problem or situation. And I do not represent you and I am not your attorney unless you have hired me with a representation agreement. While I do want you to consider me when you seek an attorney, you should not hire any attorney based on brochures, websites, advertising, or other promotional materials.  All original content on this site is Copyright John Gear, 2010-2022.
Photos used under Creative Commons from Tony Webster, brand0con, eirikso, Fibonacci Blue, Jirka Matousek, Rd. Vortex, rcbrazier - Brazier Creative, cogdogblog, marfis75, marcoverch, GWP Photography, byzantiumbooks, Mic V., notacrime, emrank, Family Art Studio, dotpolka, respres, Mark Cummins, a little tune, Insulinde, Bill Wards Brickpile, Roger Chang, AnthonyMendezVO, jonrawlinson, Andres Rueda, Franco Folini, inman news, Pictures by Ann, ph-stop, crabchick, Jilligan86, Elvert Barnes, p.Gordon, CarbonNYC, Digital Sextant, darkpatator, Neil T, rictic, Mr. Mystery, SeanC90, richardmasoner, www.metaphoricalplatypus.com, lindsayloveshermac, Santacreu, =Nahemoth=, ReinventedWheel, LadyDragonflyCC - On Vacation, See you all soon!, Mr. T in DC, Nisha A, markcbrennan, Celestine Chua, Furryscaly, smkybear, CarbonNYC, radioedit, Don Hankins, Henrik Hovhannisyan, CoreBurn, Mike Licht, NotionsCapital.com, David Masters, SeeMidTN.com (aka Brent), SoulRider.222, amboo who?, robwest, Rob Ellis', floeschie, Key Foster, TechCocktail, That Other Paper, marcoverch, oskay, Muffet, rodaniel, Alan Cleaver, Mike Licht, NotionsCapital.com, Horia Varlan, xJasonRogersx, billaday, BasicGov, One Way Stock, mikebaird, Nevado, shalf