Securing Our Communities: Mortgage Wire Fraud

Updated: Nov 12, 2019

Each week, the NTIC Cyber Center highlights a different social engineering scam impacting individuals and communities within the National Capital Region. We encourage everyone to share this information with friends, colleagues, and loved ones to help reduce their risk of becoming a victim of financial fraud and identity theft.

Mortgage wire fraud, also known as a mortgage closing scam, is a type of social engineering scheme in which perpetrators steal money or elicit personally identifiable information (PII) from victims through fraudulent real estate correspondence for financial gain or identity theft. Perpetrators take advantage of the numerous steps taken and parties involved in the real estate acquisition process. They target victims using email, voice messaging services, and websites.

Perpetrators often emerge around the time of an impending real estate transaction and may masquerade as sellers, real estate agents, brokers, lenders, title companies, and law firms, trying to trick victims into wiring funds designated for closing costs to a fraudulent account. They conduct this scam by hacking into the email accounts of one or more parties involved in the transaction, usually by sending phishing emails designed to capture email account login credentials. They also may conduct reconnaissance on real estate listing websites to gather information about listing agents such as their names, email addresses, and phone numbers to locate new targets or add legitimacy to current scams. Once these scammers have identified targets and gained unauthorized access to their email accounts, they monitor for correspondence indicating that a transaction is about to close. Then they send fraudulent wiring instructions to the buyer, either by using the target’s own account or by spoofing the target’s email address.

It is important to note that funds erroneously wired to an account outside of the United States are often very difficult to recover and, in some cases, may not be recoverable, even if law enforcement is contacted. To reduce your risk of becoming a victim of mortgage wire fraud, please review the following prevention and mitigation strategies:

  • Learn about the real estate closing process and make note of all parties involved, including their contact information, before any funds are paid. Make sure you have multiple ways to contact your real estate agent, lender, or anyone else involved in the transaction, so that you verify any instructions that are provided. For instance, if you receive an email with instructions that differ from what you were expecting, call the sender directly to verify that he or she actually did send the email.

  • Scammers often try to pose as legitimate real estate agents, brokers, or lenders by copying logos or using similar names in online correspondence so be sure to verify associated business addresses, phone numbers, and other contact information to help determine the legitimacy of the organization.

  • Do not rush through the real estate transaction process. Scrutinize any request that requires you to act immediately or in an unrealistic time frame, especially urgent wire transfer requests that trick you into acting quickly without thinking.

  • Before sending any money either through wire transfers or other means, be sure to notify the parties involved using a different contact method, such as over the phone, and then confirm that the funds were received.

  • If possible, request that all parties to share wiring instructions via encrypted email or other secure communication platforms.

  • Use strong, complex, and unique passwords on all accounts and enable multifactor authentication on every account that provides that option.

Report mortgage wire fraud attempts to all affected parties, your local police department, and the FBI’s Internet Crime Complaint Center.

The NTIC is governed by a privacy, civil rights, and civil liberties protection policy to promote conduct that complies with applicable federal, state, and local laws. The NTIC does not seek or retain any information about individuals or organizations solely on the basis of their religious, political or social views or activities; their participation in a particular noncriminal organization or lawful event; or their race, ethnicities, citizenships, places of origin, ages, disabilities, genders, or sexual orientations. No information is gathered or collected by the NTIC in violation of federal or state laws or regulations.