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Beware Mortgage Closing Scams

Closing on a home is an exciting and often stressful time. There’s so much to do, and emotions are running high. Unfortunately, one slip-up opens a door for scammers to destroy it all. Here’s what to know about mortgage closing scams and how to avoid falling victim.

How the Scams Play Out

In a mortgage closing scam, scammers send spoofed emails to homebuyers, appearing to represent a real estate agent, legal representative or another trusted entity. It will arrive just days before the scheduled closing and direct the homebuyer to wire the closing funds to a specific address. Of course, if the homebuyer follows through, they wire the money directly to the scammer.

In a variation of this scam, a homebuyer is contacted by an alleged mortgage lender with a new loan offer. The loan features lower rates, but demands an upfront fee. Unfortunately, the “lender” is a scammer who will simply pocket the money and/or commit identity theft.

Protect Yourself 

Here’s how to avoid falling victim to a mortgage closing scam:

  • Choose two trusted people in the mortgage closing process to be your professional contacts throughout. They can be anyone from your real estate agent and mortgage lending teams. Discuss all details of the closing process with these individuals, including the transfer or funds and the exact protocol for payments. Choose a specific phone number for each of you to use for contacting the other about the mortgage process.
  • Before wiring any funds as part of the closing process, confirm instructions with your designated trusted individuals.
  • Never follow changes in instructions sent by email without confirming these changes with your trusted contacts.
  • Avoid using phone numbers or clicking on links in emails from unknown sources.
  • Never agree to pay upfront fees on a loan.
  • Be wary of unsolicited loan offers. Research every potential lender by looking for proper documentation and a positive BBB rating.
  • Never email sensitive info. Share this documentation in person instead.
  • Never share personal information over the phone with an unverified contact.

Red Flags

Look out for these red flags that can indicate a mortgage closing scam:

  • A sudden, unexplained change for the transfer of funds during the closing process.
  • A lender demands up-front fees before the loan process can ensue.
  • A lender asks you to share sensitive data early in the application process.

If You’re Targeted

If you think you’ve been targeted for a mortgage closing scam, contact your credit union and/or the wire-transfer company immediately. Explain the situation and ask for a wire recall. Reporting the error as quickly as possible makes it more likely for you to reclaim the funds.

It’s also a good idea to file a claim with the FBI and the FTC.

Follow the tips outlined here to avoid falling victim to mortgage closing scams.

RGCU Mortgage Services

Are you looking to make a home move for you and your family? Rio Grande Credit Union offers a wide range of mortgage services that are tailor fit for your lifestyle. We offer a personal, local experience with competitive rates, dedicated service and unique home loan options. Together, we’ll find the loan that feels like home.



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