Real Estate Scams

REAL ESTATE SCAMS AND FRAUD ARE ON THE RISE 

While attempts to scam homebuyers out of their closing funds have been around for over a decade, the proliferation of cyber criminals means the risk remains a serious one. By some estimates, around a billion dollars a year is lost to this type of scam, turning the joy of a home purchase into a staggering setback for many homebuyers.

Here's a quick rundown of how this scam typically plays out:

1. Criminals obtain the details of an upcoming real estate closing, possibly by hacking the account of a participating party.
2. The scammers produce a fake email, phone call, text message, or other communication to contact the homebuyer while posing as a trusted party.
3. The buyer receives false wire instructions and sends their closing funds to the criminals instead of the correct recipient.

While we take steps to educate our borrowers on how to guard against these scams, it never hurts for you to emphasize best practices like these to your buyers:

• Only obtain wire instructions directly from the settlement agent and verify those instructions in person or by calling a trusted phone number.
• Be skeptical of the contents of any wire instructions that are received, including phone numbers and email attachments. 
• Call your bank immediately if you believe you've wired your funds to the wrong recipient.

For more information, visit the Consumer Financial Protection Bureau's mortgage closing scams page