Mortgage Wire Fraud Guidelines On Purchases And Refinances

This BLOG On Mortgage Wire Fraud Guidelines On Purchases And Refinances Was PUBLISHED On May 29th, 2020

Mortgage Wire Fraud
Gustan Cho Associates

It is no secret that the mortgage business has its fair share of fraud.

  • Due to lax rules and mortgage guidelines in mortgage lending, the who mortgage industry went through an overhaul after the 2008 Recession
  • Loan programs such as no doc loans, stated income mortgages, and adjustable rate mortgages with initial teaser rates, once very popular, is no longer in existence
  • Federal Income Tax Returns were required by lenders but lenders did not verify the validity with the Internal Revenue Service
  • Mortgage Fraud was very common prior to the Real Estate and Sub-Prime Crisis

In this article, we will discuss and cover Mortgage Wire Fraud Guidelines On Purchases And Refinances.

Mortgage Rules And Regulations After 2008 Real Estate And Mortgage Meltdown

Since the implementation of the SAFE Act in July 2008, mortgage loan officers now have a license number:

  • This helped clean up the business and the whole industry
  • More regulations followed on July 21, 2010 when the Dodd-Frank Act was put in effect
  • This act was to limit predatory lending practices by banning highly risky loan products such as stated income loans and negative amortization loans
  • While this hurt the highly-qualified consumer, it does protect the industry as a whole
  • Now we all must document anything and everything throughout the mortgage process
  • The Dodd-Frank Act also put minimum credit score requirements on mortgages
  • The average FICO score on mortgages originated today are by far the highest in history

The Dodd-Frank Act is currently being reformed under the Trump administration.

Mortgage Wire Fraud Guidelines On Wire Transfer Fraud

What are the guidelines for mortgage fraud

There is a new trick that all mortgage clients need to be aware of and it is called WIRE TRANSFER FRAUD.

  • Reports have surfaced from the Federal Bureau of Investigation (FBI) and the Consumer Financial Protection Bureau (CFPB) that a new scheme involving fraudulent wire transfers to title companies is on the rise
  • This scheme involves emails sent by a scammer who appear to be from the consumers’ title company that contains instructions to wire them funds needed for closing
  • These instructions may say something along the lines of “funds needed immediately”

These funds will never reach the title company but will be wired directly to the scammers!

How To Avoid Potential Mortgage Wire Fraud Violations

What can you do to avoid this issue?

The funds needed for closing can ALWAYS be submitted to the title company in the form of a Cashier’s Check.

  • A Cashier’s Check is a check drawn directly from the bank’s funds, the opposite of a personal check. This is the reason many banks charge a small fee to execute a cashier’s check

If you are not able to use a Cashier’s Check, we strongly recommend you personally verify the wiring instructions with your title company.

  • Before you transfer any funds, make sure you double check, either in person or on the phone, the exact instructions
  • If you’re going to do this over the phone, we recommend you make sure the phone number you are calling is the trusted and verified number to the title company

Scammers these days are good at what they do!

Falling Victim To Potential Mortgage Wire Fraud

Which means falling victims of potential mortgage fraud

What should you do if you think you received one of these emails?

  • Immediately contact the title company and lender
  • They will be able to tell you the wiring instructions are fraudulent
  • Contact local authorities and report the scammer

At Gustan Cho Associates Mortgage Group, our mortgage borrowers financial security is our top priority! Feel free to contact us at Gustan Cho Associates about any mortgage related issue. For more information on how you can protect yourself, please visit the Consumer Protection Financial Bureau .

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