By The Mortgage Team
You’ve worked hard for your home. Don’t let a scammer take it all away.
Anyone who has bought a house knows the vast amount of communication that is required between multiple parties. And if you’re a first-time homebuyer, you’re discovering this first-hand. Documents must be signed, wire payments arranged, and e-mail is a common channel for these types of quick communications with the multiple companies that can be involved in a single closing. Between 2015 and 2017, reports of a sophisticated scam involving these companies and homebuyers, primarily through e-mail, have increased 1,100 percent.
The danger doesn’t abate after closing. Recently, Kirtland FCU has received reports that our members with mortgages have received a phishing e-mail (an e-mail that looks like it’s from us but isn’t) stating that their mortgage had been sold, and they should begin making their payments to a new party. Of course, the mortgage hasn’t gone anywhere (we NEVER move our members’ mortgages to be serviced elsewhere). But anyone falling for this scam will not only lose their payments to this fictitious “new company”, but their actual mortgage payments go unpaid. It’s only at that point that the member realizes they’ve been scammed.
The scam begins when a thief gains access to an e-mail account of one of these legitimate real estate, title, or lending companies through hacking. Once inside the e-mail account, they have access to all communication between buyers, sellers, agents, title companies, and lenders. The thief can see scheduled closing dates, and they now have access to private financial information regarding the sales.
Using this information, the thief chooses a sale that is approaching its closing date. The thief creates an e-mail that appears identical to one from the legitimate company. That e-mail is then sent to the buyer at the last minute, changing the payment information for the closing funds to the thief’s wire destination. If this information is followed and the money sent to the scammer’s new destination, the buyer will often have no idea anything has gone wrong until they are contacted by one of the companies asking about the missing payment. Meanwhile, the thief will move the funds and move on, before anyone is the wiser.
In some cases, victims have sent their intended closing costs or even the full payment for their new house to these fraudulent wire accounts. In 2017 alone, there was an estimated loss of nearly $1 billion in real estate transaction costs resulting from this scam. And the buyer is on the line for the lost funds—there is often little to no recourse for victims of this scam. Therefore, avoiding it is paramount.
When it comes to this scam, the low-tech option may be the best option. Hand-delivered cashier’s checks are often a more secure way to physically make a payment during the closing process.
At the Kirtland FCU Home Loan Center, the mortgage team maintains close relationships with their members and other companies in the mortgage process, which reduces the likelihood of this scam striking their members.
And when a member already has their savings and/or checking accounts at Kirtland FCU, payment transfers are handled directly by the mortgage professionals without members needing to lift a finger (except to sign the final papers). And of course, if you already have a mortgage with Kirtland FCU, you will never be asked to send your payments out of state or to a different company.
Remember, when you’re getting ready to close on a home, make sure you’re talking to the right people. Come see the mortgage experts at Kirtland FCU’s Home Loan Center.