HOW IT HAPPENS – It’s a nightmare scenario for any lender and homebuyer: right before closing, a scammer manages to trick the homebuyer into wiring their down payment and the lender’s mortgage loan proceeds to a bogus account. Neither the lender nor the homebuyer realizes that a closing agent was hacked and now someone pretending to be them has misdirected the funds. The deal is lost, the lender loses out on business, their reputation is now in question, and the misdirected loan proceeds is an immediate financial hit to equity. Last year alone, the FBI reported over $1Billion stolen through mortgage wire fraud scams that affected thousands of Americans.
Wire fraud cases continue to grow in the United States, rising to over 10 times higher than the previous years. The FBI has also warned several times that email compromise schemes are spiking, many of which include this type of real estate fraud.