Buying, selling or refinancing a home often involves moving large sums of money, making these transactions an attractive target for criminals. One scam homeowners may face is mortgage wire fraud, a scheme in which fraudsters attempt to trick borrowers into sending funds to fraudulent accounts by posing as trusted parties involved in the transaction.
These scams can happen at any stage of the home financing process, but are most common when payments like closing funds, sale proceeds or mortgage payoff funds are being transferred. As scammers become more sophisticated, it's important to watch for warning signs and verify payment instructions before sending money.
Understanding mortgage wire fraud can help you protect your finances and avoid a costly mistake.
Click to navigate:
- Why Mortgage Payoff Transactions Attract Scammers
- Common Mortgage Wire Fraud Tactics
- Red Flags to Watch For
- Steps You Can Take to Protect Yourself
- What to Do if You Think You've Been Scammed
- A Little Extra Caution Can Go a Long Way
Why Mortgage Payoff Transactions Attract Scammers
Mortgage payoff transactions involve sensitive financial information, multiple parties and large sums of money. During these transactions, homeowners may communicate with mortgage servicers, title companies, escrow professionals, attorneys or real estate agents.
Scammers may attempt to take advantage of this activity by inserting themselves into the process. Their goal is simple: convince you to direct your funds to an account they control.
In many cases, these schemes begin with fraudulent emails, altered documents or unexpected phone calls that appear to come from a trusted company or professional.
Common Mortgage Wire Fraud Tactics
Fraudsters could use multiple methods to make their communications look legitimate. Some common schemes include:
Fake Payment Instructions
A scammer may send what looks like an official payoff statement or payment request that contains fraudulent banking information. Everything about the document may look authentic except the account where the money is being sent.
Impersonation Calls
Some criminals go beyond email and operate phone lines staffed by live agents posing as representatives from a mortgage company, title company or bank. If a homeowner calls the number provided in a fraudulent message, they may unknowingly speak with a scammer.
Fraudulent Login Links
Emails may contain links that direct homeowners to fake websites designed to capture usernames, passwords and other sensitive information.
Compromised or Spoofed Emails
Scammers may use email addresses that appear legitimate to send fraudulent payment instructions that seem to come from someone involved in your transaction. In many cases, the fraudulent email address differs only slightly from the legitimate address, such as a single changed, missing, or additional letter, number, or symbol, making it difficult to spot. Always carefully verify the sender's email address and independently confirm any payment instructions before sending funds.
Red Flags to Watch For
While scams are becoming increasingly sophisticated, certain warning signs should prompt extra caution:
- Unexpected requests to send funds quickly
- Changes to payment instructions without explanation
- Emails from unfamiliar addresses or domains
- Requests to verify account credentials through a link
- Phone calls that create a sense of urgency
- Payment instructions that differ from information you previously received
Whenever something feels unusual, pause and verify before taking action.
Steps You Can Take to Protect Yourself
Before sending funds to a new account or payment destination, take a few minutes to verify key details and protect yourself from potential fraud.
1. Verify Information Through Trusted Channels
If you receive payoff instructions by email, independently locate your mortgage company's official phone number or sign in to your online account. Contact the company directly to confirm the information.
Avoid relying on phone numbers or links included in messages that could have been altered or sent by scammers.
2. Confirm Banking Details Before Sending Funds
Before initiating a wire transfer or large payment, verify the bank name, routing number and account number with your lender or servicing company through a trusted source.
Even if the payment instructions appear to come from an official document, it's worth taking the extra step to confirm.
3. Be Careful When Sharing Sensitive Documents
If payoff information must be shared with a title company or another professional involved in the transaction, consider asking them to independently verify the payment details with your lender before any funds are transferred.
4. Stay Alert for Unusual Communication
Scammers often rely on urgency, confusion or last-minute changes. If you're pressured to act immediately or asked to bypass normal verification procedures, treat the request with caution.
What to Do if You Think You've Been Scammed
If you believe funds were sent to a fraudulent account, acting quickly may improve the chances of recovering them.
Contact Your Financial Institution Immediately
Inform your bank that the wire transfer may be fraudulent and ask whether a recall or recovery process can be initiated.
Notify Your Mortgage Company
Contact your lender or servicer as soon as possible so they can document the incident and help identify any additional risks to your account.
Report the Incident
Consider filing a report with:
- The FBI's Internet Crime Complaint Center (IC3)
- Your local law enforcement agency
Prompt reporting may help investigators track fraudulent activity and potentially assist other consumers.
A Little Extra Caution Can Go a Long Way
Whether you’re buying, selling, refinancing or paying off a mortgage, the process should be as smooth as possible. While mortgage-related scams continue to evolve, taking time to independently verify payment and contact information can help you protect your personal information and money.
When in doubt, contact Shellpoint directly using trusted contact information and confirm instructions before sending funds. A quick verification today could help prevent a costly loss tomorrow.