Real Estate News

Which federal agencies are involved in the investigation of mortgage fraud?

Federal & Government Mortgage Fraud Prevention Agencies

• Federal Bureau of Investigation (FBI) ...
• Federal Trade Commission (FTC) ...
• Fannie Mae & Freddie Mac. ...
• U.S. Department of Housing & Urban Development (HUD) ...
• U.S. Postal Inspection Service. ...
• U.S. Secret Service. ...
• Securities & Exchange Commission (SEC)

Secret Service: Real Estate Wire Fraud On The Rise - some have reported thousands of dollars going missing in a matter of mere seconds. According to a news report from News 6 ClickOrlando, one Central Florida resident lost the $50,000 down payment they planned to use on a home, while another lost upwards of $160,000, but how?  According to an alert issued by the Secret Service, cybercriminals will impersonate mortgage lenders and send either completely fictitious or altered mortgage payoff statements to title companies. From there, title companies follow the wiring instructions included in the scam emails and wire funds to accounts controlled by the cybercriminals.

Wes Stricklen, a Volusia County realtor for 7 years, spoke to News Daytona Beach and said communication between sellers, banks, and lenders can help prevent most of these problems.

“Communicate directly with the title company to get a secured email for the wiring instructions,” said Stricklen. “When it’s time to send the wire, go to their bank, have their banker call the title company, have the title company read the wiring instructions, and make sure it matches with what was in the email.”

Similarly, double-check the email addresses that message you. Some email addresses may look legitimate, even using a name you may recognize, but the end of the address may be different.

Wire Transfer Scheme Targets Mortgage Payoffs, Secret Service Warns - 

The Secret Service provided the following tips to help prevent the fraud:

• Update policies and procedures to ensure proper verification of information before releasing funds.
• Independently obtain mortgage payoff statements and confirm with verified and trusted sources.
• Independently verify the authenticity of information included in correspondence and statement.
• Do not rely on third parties, such as mortgagors or other transaction participant, for information.
• Restrict wire transfers to known and previously verified accounts.
• Pay using checks when the information cannot be independently verified.
• Have a clear and detailed Incident Response Plan. ALTA has developed a Rapid Response Plan for Wire Fraud Incidents. Access the plan, as well as other wire fraud resources, here.

Report financial crime by contacting a U.S. Secret Service Field Office.