Basics on Down Payment Wire Fraud

You come to a mortgage group like Altius Mortgage and our partners at Mortgage Ogden because you want a reputable, experienced company to walk you through what can be a complex process. You want the security of knowing you’re dealing with a process that’s above-board from the start.

Unfortunately, some unscrupulous characters do exist in our industry, and our mortgage brokers are here to protect you from these. One common scam that’s run in the mortgage loan world: Down payment wire fraud. Here’s how this happens, and how you can protect yourself from it ever happening to you.

How Down Payment Fraud Happens

The timing of down payment scams is important to the scammers – they strike when you’re actually in the process of buying a real home, to make things feel as real as possible. They’ll generally send you an email that looks like it’s from your actual real estate agent (with an address that’s often just changed by a few characters), telling you instructions for your down payment have changed and providing you with a new account number to transfer money to.

There are a few possible red flags that can alert you something is off here. For one, they’ll ask for the incorrect amount, or a partial amount. For another, they may ask for different timing than usual – nearly all normal down payments are made the day before closing.

Rising Rates

This kind of fraud is on the rise, so be careful. It exploded by almost 500 percent in the year 2016, and became the highest individual form of fraud out there in terms of total dollar losses – hundreds of millions were lost during the calendar year.

Stopping Fraud

The simplest way to prevent this process from ever getting off the ground is to simply call your real estate agent the moment you notice any red flags. Ask them if they sent you the curious email, and proceed accordingly. If you do get duped and fall for the scam, call your bank immediately, then contact the FBI and Federal Trade Commission.

Spotting Fraud

Anytime you see an email with money-wiring instructions and account numbers, this should immediately raise some concerns. Virtually no reputable financial institution does things this way. Anytime you do transfer money for a down payment, ask your bank to confirm the account number and name on the receiving end. To be safe, contact your real estate agent or title company after sending the transfer to ensure that the money was sent and received properly.

For more on avoiding down payment scams, or to find out about what our mortgage brokers can do for you, contact Altius Mortgage today.