Protect Yourself From Mortgage Closing Scams
One of the most vital stages in purchasing a home is signing the mounds of the final paperwork and handing over that sizable down payment. This process can be stressful to anyone purchasing a home, whether for their first or third.
The FBI says scammers are increasingly taking homebuyers during the closing process, according to the Consumer Financial Protection Bureau.
Between 2015 and 2017, it has been reported that the attempts of fraud rose 1,100 percent and in 2017 alone there was an estimated loss of nearly $1 billion in real estate transaction costs.
Through a sophisticated phishing scam, the scammers attempt to make you deposit the closing costs and your down payment into a fraudulent account by confirming or suggesting last-minute changes to your closing instructions.
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These schemes can be very detailed and often appear as if they are legitimate communications with your realtor or sales agent.
How do they try and trick you?
Those who are attempting to get your money into a fraudulent account actually target information about you and your business transactions from your realtor and/or home financial person.
They will then find out when your closing process will happen and during this time they will send you phony emails you with false instructions for sending in the closing funds.
How to protect yourself and your funds
There are a number of things that you can do to protect yourself from becoming a victim of this type of scan.
- You should identify two trusted individuals within the agencies you are working with so that you can confirm the closing process and payment instructions.
- Before you begin the closing process, discuss in person or by phone the details of the procedure with these two individuals from the agencies.
- Be very careful not to exchange any details about your closing procedures over email.
- To be cautious you may want to create a code phrase known only to the trusted partners if you need a secure way to confirm their identities in the future.
- You should also write down their names and contact information or get their business card that has such information.
- Verify the closing instructions which should include the account name and number with your trusted representative either by phone or in person.
- Never follow instructions contained in an email.
- When communicating avoid using account numbers, phone numbers, or even links in emails.
- Avoid downloading any attachments or clicking on any links without first contacting your trusted representatives as this could create a gateway for scammers to get to your funds.
- Never email any financial information. Email is not a secure way to send any type of financial information.
- Be cautious when it comes to phone conversations. It is hard to tell if a call is legit or not. If someone should call you requesting personal or financial information, you should tell them that you will call your trusted representative using the information they gave you and will give them the information that they are requesting.
Dishonest people are always finding ways to obtain your information and funds.
What to do if you fall victim
If you fall victim to a scam, you should immediately contact your bank or the wire-transfer company and ask for a wire recall.
By reporting the incident immediately, you will increase the chances that you will be able to recover your money.
Next, you should file a complaint with the Federal Bureau of Investigation (FBI) you can contact their Internet Crime Complaint Center here.
Taking these few steps at the beginning of the closing process will give you peace of mind in protecting your personal and financial information.
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