Mortgage Wire Fraud: How to Protect Your Closing Funds

Before sending closing funds, verify the destination through a trusted channel you established independently of the payment message. The correct purchase address, a familiar logo and the exact closing amount don't prove the account belongs to the settlement company.

Mortgage wire fraud often works by inserting false instructions into a real transaction. You are expecting to send a large amount, everyone is busy and a message arrives at a believable moment. The defense is a payment process that doesn't depend on trusting that message.

Set up the verification contact early

Identify the settlement company and the person authorized to confirm instructions. Obtain and independently verify the company's contact information before the final funding day. Save it outside the email thread.

Ask how the company sends instructions, whether it uses a secure portal and how account information will be confirmed. Also ask what happens if the amount changes. A real revision to the amount shouldn't bypass verification of the destination.

The loan officer and real estate agent can help coordinate, but the actual receiving account should be authenticated with the settlement company responsible for receiving the funds.

Verify the account before the bank releases money

Call using the independently confirmed number. Review the account name, bank, routing number, account number and transaction reference through the company's approved process. Don't use the phone number supplied in an unexpected message as the only verification source.

A scammer can answer a number included in the fraudulent instructions. Replying to the same email can also send your question back to the person who created the fraud. A separate communication channel is what makes the check useful.

If you can't reach the trusted contact, pause the transfer and contact the closing team through known information. A deadline doesn't authenticate a destination.

Treat changes as a reason to recheck

An urgent instruction to use a different bank or account deserves independent verification. So does a request for secrecy, a personal account, cryptocurrency or a payment method that differs from the established settlement process.

Don't rely on a message saying the earlier instructions were wrong. Confirm the change with the actual company using trusted contact details. If different team members give conflicting information, resolve the conflict before releasing money.

A small test payment isn't a substitute for authenticating the recipient. It can confirm only that the account receives money, including when the account belongs to the wrong person.

The right amount can still go to the wrong place

Hypothetical example: the final disclosure calls for $62,400. A fraudulent email repeats that amount exactly but substitutes a receiving account. Matching the number to the disclosure catches an amount error. It does nothing to prove the bank account.

Verify those two questions separately: how much is due, and where should it go? Use the lender and settlement reconciliation for the first. Use independent authentication for the second. Cash to close and the Closing Disclosure review explain the amount.

After sending, confirm receipt with the actual settlement company through its trusted channel. A bank wire confirmation usually establishes that a transfer was sent, not that the intended closing company received and credited it correctly.

If money may have gone to a fraudulent account

Contact your bank or wire transfer provider immediately. Tell its fraud team the transfer may be fraudulent and request urgent recall or other available recovery action. Ask it to contact the receiving institution. Don't wait for the next business meeting with the closing team.

Notify the real lender and settlement company using trusted contact information. Report the incident to the FBI's Internet Crime Complaint Center at IC3.gov. Preserve the messages, attachments, account details, transaction confirmation and timeline for the bank and investigators.

Recovery isn't guaranteed. Speed matters, but no legitimate person can promise that a recall will recover all funds. Be wary of someone demanding another payment to unlock or insure a recovery.

Keep the closing plan realistic

Confirm bank transfer limits, cutoffs and settlement deadlines ahead of time so the verification call doesn't happen in a panic. Use secure channels for sensitive documents and protect account access with appropriate authentication.

If a suspicious request appears, tell the team exactly what changed and who sent it. The purchase can be rescheduled or clarified. The money should leave only after the receiving instructions have been verified.

A safe wiring checklist

1. Get your title company's phone number at the start, from your contract or their official website.
2. When you receive wiring instructions, call that number to confirm every detail.
3. Ignore any email that says the instructions have changed.
4. Send a small test amount only if your title company recommends it.
5. Call to confirm the funds arrived the same day.

Scammers often copy the look of real emails from agents, lenders and title companies. A phone call to a number you already trust is the one step they can't fake.