Fraud is on the rise. Here’s how to help protect yourself.

Let’s say you’re about to buy your first home. You are understandably thrilled yet nervous as you count down the days until the closing. You’ve been in contact with your real estate agent, your loan office and the rest of the members of your homebuying team to make sure that all your closing documents are in order and that the day of the closing will go off without a hitch.

Most of these communications have taken place over the phone or email, which means that you may not know the people you’re communicating with as well as you may like.

A few days before closing, you receive an email from a name you don’t recognize. It does seem to come from the title company your loan officer mentioned. The email gives you instructions for sending your down payment and closing costs—an amount in the tens of thousands of dollars. Once it goes through, it will be the largest transaction you will have ever made in your life.

How comfortable do you feel sending the money?

Protecting yourself during the mortgage process

For many people, buying a home is the most significant financial decision they’ll ever make. Part of that process for almost everyone involves securing a mortgage. As you navigate the mortgage process, private, sensitive information is shared with your lender, agents, real estate lawyers and title companies.

Unfortunately, we’re all at risk when it comes to cybersecurity. Savvy predators are constantly finding ways to creatively attack unsuspecting individuals and organizations. This has been a problem for years, but the rate of fraud in real estate transactions has only increased during and after the pandemic.

A perfect storm for fraud

These past few years has been a productive time for fraudsters.

During the height of the pandemic, the combination of increased real estate transactions, due to historically low mortgage interest rates, and the need to conduct as much of the transaction online to maintain physical distance made deals vulnerable. A recent survey of title agents by money.com revealed that a third of all real estate transactions in 2020 included some sort of wire fraud attempt. And risk of fraud remained high, even as the market contracted over the last year.

It’s not hard to understand why when considering the amount of money changing hands.

These legitimate-looking emails are part of a tactic known as spoofing, where a scammer creates an online experience that seems authentic but is not. You think you’re dealing with someone else, a member of the title company or your loan officer’s team. When you find out you’ve been duped, it could be too late.

Because the scammers monitor the process of the deal, they could know details that you wouldn’t expect an online fraudster to know—your full name, address, phone number, even the exact amount of money you agreed to wire for closing.

Help keep yourself safe from scammers

You don’t need to worry, so long as you follow these precautions to make sure you are keeping yourself and your financial information as secure as possible. Here’s what you should always do to make sure your experience when buying a home or refinancing is secure.

Never email financial or sensitive information. Use a secure method to transmit your financial information to your loan officer. Emailing financial documents from your personal account is not secure. All Proper Rate loans transfer documents safely through our secure system called Transfersafe.

• Expect that all correspondence with your loan officer will come from and go to his/her work email address, never a personal account.
• Ask your loan officer to give you a heads up on who from his or her team will be in touch throughout the process—if they don’t let you know from the get-go. If an unfamiliar person asks you for confidential or sensitive information and says he or she is on your loan officer’s team, call your loan officer to confirm their identity.
• Verify that email addresses are exactly the same as what is in your records. You may receive an email from someone who appears to be your agent or a member of your loan officer’s team but in fact are not. Before responding, check that the email address appears as it should.
• Hover your mouse over every link in an email before clicking on it to make sure you recognize the domain name in the URL. Spoofed emails may look exactly like a company’s email, but the link could direct you to another site.
  • You should also double check that any email you receive is actually from the company’s system by hovering over or clicking on the sender’s address.
• Never call a number you don’t recognize; only call a number that you know is official. Lately, scammers have asked borrowers to call a number they provide to confirm information before sending money. That seems like exactly what you should do to protect your information, but in these cases the number provided also belongs to the scammer. Only call a number you’re sure belongs to your loan officer’s branch.
• Call your loan officer directly if you receive any questionable requests or emails related to your mortgage.
• Understand who will supply you with your wire instructions.
• Only accept wire instructions that have been provided to you securely, either through a secure email system or a secure document sharing portal.
• Call the intended recipient of your funds before wiring anything, at a number you know is valid, to confirm the instructions. Be very wary of any request to change wire instructions you already received—wire instructions do not change.
• Don’t trust an email with a generic greeting; that’s a red flag. Most of the correspondence you receive should be addressed to you specifically. If you do receive an email like that, double-check with your loan officer to find out if it’s legitimate.
• Be on the lookout for misspellings and bad grammar. These can be an indicator of a fake email and at times it may even be intentional—mistakes like this can help fraudsters avoid spam filters.

If you feel you’ve been a victim of a phishing scam or fraud as it pertains to getting a mortgage, give your loan officer a call right away to let him or her know. You should also report any such instance to the Federal Trade Commission, which aims to protect America’s consumers, or the FBI’s Internet Crime Complaint Center.

While it’s smart to be aware of the risk of fraud and do what you can to prevent it, you shouldn’t be scared. By practicing smart online transaction behavior, you’ll give yourself the best chance of avoiding fraud and closing on your home hassle-free.