For most, owning a home is the largest purchase we will make in our lifetime. Unlike personal loans or credit cards, a house title is public information, which can attract the attention of scammers looking to receive a big payout at your expense. At Community West Credit Union, we know how important it is to work with a trustworthy lender. Take a look at the different types of mortgage scams and what to look out for so you can avoid becoming their next victim.
What is Mortgage Fraud?
A house purchase is public record, including the property owner’s name, when the house was closed on, the amount of the loan, and the name of the lender who funded the loan. This information opens the door for shady characters to attempt to exploit that information and receive large payouts on your behalf—and is more common than you may think.
According to the FBI, more than 13,600 people fell victim to mortgage scams in 2020 alone. First-time homeowners can easily fall into these traps when being introduced to the housing scene, but any homeowners can be potential targets. Below, we go over common scams to watch out for in your mailbox, inbox, and more.
What Types of Mortgage Scams Should You Watch For?
There are two types of mortgage scams to be aware of, the scams for housing and the scams for profit. We’ll focus on scams for profit, typically scammers posing as lenders, brokers, and other entities making false claims to obtain monetary compensation or equity from lenders and homeowners. To keep you and your home safe, watch out for the following solicitations:
Fraudulent Third-Party Mail
Some scammers, and even legitimate businesses, will take public records and send offers of service through the mail. Frequently, this mail is engineered to look like it came from your lender and can include the lender’s company name or logo, mailing address, and contact information. These letters often include a sense of urgency, and they have been trying to contact you regarding a “very important matter regarding your mortgage.”
- Signs to look for: Don’t be fooled- there will be a small disclaimer indicating they are “not affiliated with or endorsed by any bank or lending institution,” typically at the bottom/back of the letter. The disclaimer is your indicator that this mail is not from your lender and should be discarded.
Phishing (Email Scams)
Phishing scams use fake emails that look like they came from a legitimate source—such as your lender or broker. The message typically includes a notice of unusual activity on your account along with a sense of urgency to get in contact with them by clicking a link, calling a phone number, or sending a text reply on your mobile phone. This is an attempt to entice you to share your sensitive information, which can lead down a devastating path to identity and financial theft.
- Signs to look for: Phishing emails are tricky, but there are typically tell-tale signs that the email is not legitimate. These could include a sense of urgency, grammar and spelling errors, and suspicious links.
- Further Tips:
- Hover over the sender’s email address. Carefully check that the email address matches who you should be receiving correspondences from. Often, the domain will be slightly different and can sometimes be tricky to decipher. Misspellings or look-a-like characters are often used to deceive the recipient. (i.e @communitywestcu.org vs. @comunitywestcu.org or @communitywest.org)
- Hover over any links before clicking on them. Determine if the site looks reputable. An easy way to determine if a site is legitimate is to look up the website in a search engine to determine the legitimate website domain.
- Example- you receive an email with CLICK THIS LINK NOW. (Note: Do not click the above link, it is not a real website.) Hover over the example to preview where the link will take you. Google the website first- DO NOT CLICK ON ANY LINKS BEFORE THIS STEP. In this example, the link appears to be linked to Community West at first glance. However, if you google Community West, you will see the actual domain is https://www.communitywestcu.org.
- Further Tips:
Smishing (SMS Text Messages)
Smishing, exactly like phishing, is an attempt to solicit your personal information – only the channel is via text messaging.
- Signs to look for: Many of your red flags are the same as in phishing. These typically include a sense of urgency to get in contact with them by clicking a link, replying via text, or calling a phone number provided. They will often ask you to fill in sensitive personal information, and may even download/install software to infect and steal information from your mobile device.
Vishing (Phone Calls)
You may receive a follow-up call if you interact with the fraudulent text message. This is a combination attack by a phone call rather than email or text message. If you receive a phone call asking to provide confidential information about your accounts, we recommend hanging up immediately and contacting your lender. When in doubt, always contact your mortgage lender for any questions regarding your mortgage and accounts.
You Matter Here at Community West Credit Union
Scams are on the rise, and although first-time homebuyers are more likely to fall for these scams, any homeowner can be targeted and become the next victim of a fraudulent mortgage scheme. If you have a mortgage loan with Community West Credit Union and have received a suspicious message or are unsure if we have been trying to reach you, contact us, and our friendly team will help you distinguish facts from fraud.