Your financial wellness is a priority at Travis Credit Union. With mortgage scams continuing to rise, it’s important to know how to identify them and how to protect yourself. In this blog, we’ll discuss common mortgage scams, how to spot them and ways to avoid becoming a victim.
Why are Mortgage Scams on the Rise?
Mortgage scams have become more common today than in previous years because technology has made it easier to perpetuate fraud and scams. For example, many of the steps found in a typical mortgage application process have become digital.
While this may be convenient for those becoming homeowners, scammers can impersonate financial institutions, lenders or real estate agents and steal your personal and financial data when you apply on a fake website or email link. Scammers have also become more sophisticated with their fraudulent communication to make it appear as legitimate as possible.
What Are the Most Common Mortgage Scams?
- Wire Transfer Fraud occurs when you are finalizing the closing of your home and you receive emails pretending to be the lending company, title company, escrow agent or realtor informing you of new wiring instructions for payments. The goal of these fake emails is to divert and steal funds intended for your home closing. Some ways to determine fraudulent communications are to look for any urgency in the email, any new or last-minute changes to the wiring instructions or any unfamiliar communication that is strictly via email.
- Identity Theft Mortgage Fraud occurs when an individual uses your stolen personal information to apply for home mortgages or home equity loans in your name. To&bsp;avoid these scams, review your credit report regularly to identify any unexpected credit inquiries and check all your mail and email for any loan documents you did not open.
Also, protect any personal information by destroying it properly, monitoring your credit reports regularly and turning on fraud alerts for your financial accounts. For additional protection, consider activating a freeze on your credit account, which prevents anyone from opening an account with your information.
- Mortgage Payment Redirection Scams happen when you receive a notice claiming that your mortgage servicer has changed and that future payments should be sent to a new lender or new address. Be aware of any payment instructions that differ from past official communications and verify them with your lender before sending any payments.
- Upfront fee schemes occur when a scammer promises to help you stop potential foreclosure or help you lower your monthly mortgage payments but illegally charges high fees before delivering on their promises.
How to Protect Yourself from Mortgage Scams
With financial scams becoming more common, it is important to take measures that protect yourself, your property and your information from any potential scammers. Here are a few tips to help you stay vigilant:
- Never rush financial decisions: Scammers want to create a sense of urgency in their communication, so you’ll take immediate action instead of thinking about it. Instead, take your time reviewing any information you receive via mail or email.
- Check email sender address: If the email sender address is different from the one you normally receive your mortgage communications or if it just looks off, it may be a fraudulent email address. Be wary of clicking on links from emails that may look suspicious.
- Dispose of information properly: To keep your information safe, it is important to dispose of unwanted paper documents securely. Travis Credit Union offers free shredding events throughout the year to help you properly dispose of your personal and financial paperwork. To find a shred event near you, visit our Community Events page.
- Contact your lender or financial institution: If a communication feels suspicious to you, contact your lender or financial institution to confirm any details in the communication. Be sure to contact them using information listed on their website or a trusted document or phone number. Using contact information listed in a suspicious document could be linked back to the scammer.
How Travis Credit Union Helps Fight Fraud
Travis Credit Union knows that becoming a victim of identity theft can have a negative impact on your finances and create undue stress. To help protect our members, our Fighting Fraud page lists a variety of fraud and scams to be aware of, as well as offers tips to protect yourself from them. You can also visit TCU’s Knowledge Base for information about a variety of financial topics that help you make the right money decisions.
If you’re just getting started on your home-buying journey, TCU has a variety of home loan options along with a knowledgeable team of mortgage loan consultants who will walk you through the entire home loan process. Get started today!
Frequently Asked Questions
What is a mortgage scam?
A mortgage scam is a fraudulent scheme designed to steal your money, personal information or property during the mortgage process. Scammers often pose as legitimate lenders, real estate professionals or service providers.
How can I tell if a mortgage-related email is fake?
Look for unusual sender addresses, unexpected requests, grammatical errors or messages that create urgency. Always verify the information directly with your lender using trusted contact information.
What is wire transfer fraud?
Wire transfer fraud occurs when scammers send fake payment instructions to redirect your closing funds to their account. Always confirm wiring instructions by phone using a verified number before sending money.
Why do scammers create a sense of urgency?
Urgency pressures people to act quickly without verifying information. Taking time to review requests can help prevent costly mistakes.
How can I protect myself from identity theft mortgage fraud?
Monitor your credit reports regularly and watch for unfamiliar loan applications or inquiries. Consider placing a fraud alert or credit freeze for added protection.
What should I do if I receive new wiring instructions before closing?
Do not send funds until you independently verify the changes with your lender, title company or escrow agent. Unexpected last-minute changes are a common warning sign of fraud.
What is a mortgage payment redirection scam?
This scam involves a fraudulent notice claiming your mortgage servicer has changed and directing payments elsewhere. Always confirm servicing changes directly with your lender before making payments.
Are upfront fees for mortgage assistance a red flag?
They can be. Be cautious of anyone demanding large fees upfront while promising to stop foreclosure or reduce your mortgage payments.
How does shredding documents help prevent mortgage fraud?
Shredding financial documents helps keep sensitive information out of the hands of identity thieves. Proper disposal reduces the risk of account and identity fraud.
Should I click on links in mortgage-related emails?
Only click links if you are certain the email comes from a trusted source. When in doubt, visit the lender's website directly rather than using email links.
What should I do if I think I've been targeted by a mortgage scam?
Contact your lender or financial institution immediately and report the suspicious activity. Acting quickly may help limit financial losses and protect your accounts.
What's the best way to verify suspicious mortgage communications?
Use contact information from your lender's official website, statements or other trusted documents. Never rely on phone numbers or email addresses included in a suspicious message.