Fraud isn’t exactly rampant in the mortgage field. But it does happen, perhaps more frequently than you’d think.

Sometimes, it’s the would-be borrower who commits the crime. Some lie on their applications about how much they earn, how long they’ve been on their current job, or the extent of their indebtedness. Others tell their lenders they plan to live in the house when they really don’t, while still others fail to disclose the true source of their down payments or side deals with someone who’s part of the transaction.

But sometimes it’s the loan applicant who’s hoodwinked. And they can be had in any number of ways.

One ruse that should be on every homebuyer and seller’s radar screen is what’s known in the trade as a “business email compromise.” It starts when a buyer receives an email with “new instructions” to wire the money he or she will be using to close the transaction at settlement to an unfamiliar address “because our servers are down.” But if the buyer complies, the money is usually gone forever.

This scam is far more lucrative than robbing a bank. Whereas bank robbers get away with just $1,400 on average per heist, according to Bruce Phillips, senior vice president and information security officer at WFG National Title insurance in Portland, Oregon, the average lost to swindlers in the wire scam is $140,000. One poor soul lost $1.2 million, never to be seen again.

The miscreants are successful because people “rely on emails way too much,” Phillips offers. “If you are in the process and it sounds reasonable, most people are going to do as requested. We are almost conditioned to accept an email from someone we’ve never seen before, send our money off and expect their promises to be kept.”

There are other scams, too. Like emails that advise you that your closing statement is attached. Ditto for a buyer’s so-called purchase contract addendum. Then there are those noxious emails informing you that your current credit score is available.

If you are not actively engaged in buying a house, you’d probably ignore these messages. The same goes for emails from banks with which you have no accounts.

But if you are somewhere in the buying process, phishing expeditions like these are likely to draw more than passing attention. Senders of these and other electronic missives are hoping that they’ll latch onto an unwitting homebuyer or seller who will open the attachments. Don’t!

If you do, your money or your identity is likely to be snatched in an instant, and then you’ll have hell to pay — not to mention hundreds or even thousands of dollars — just to get it back and clean up the financial mess these reprobates may cause.              To determine if an email is legit, check the sender’s address. If you get something from Experian, for example, the message will come from, not If it is ostensibly from your bank, the bank’s name will be in the address after the at sign.

“Anybody can send an email with a company logo,” warns Steve Octaviano, chief technology officer at Blue Sage, an Englewood Cliffs, New Jersey, vendor that sells a cloud-based digital lending platform. “You have to make sure it actually comes from the lender.”

Understand that you are always a target, so never trust an email, adds Phillips, the title company executive. “Always pick up the phone, call what you know is a good number for people you have been dealing with and validate the email. In every case I’ve looked at, that simple step would have stopped the scam in its tracks.”

When corresponding via email, many legitimate lenders, title companies and other service providers will invite you into their portals. That is, when you respond, they will answer back with an email of their own asking the sender to reply back with his or her password and other identifying information. If the sender can’t do that, access is denied and fraud artists are blocked.

Nowadays, 80 percent of the scams target buyers and sellers as opposed to businesses because “people don’t buy and sell houses that often and the likelihood of recovery is extremely low,” the title company executive says.

There’s no dollar figure associated with the scheme, but it is part of the $1.2-$1.3 billion that is estimated by the FBI to have been lost by consumers to wire fraud last year alone. That’s almost triple the amount lost in 2016. And since estimates are that only 14 percent of all business email compromise scams are reported to the authorities, losses are probably much greater.

Another precaution most consumers fail to take is to use an entirely new and totally different password for their real estate transactions, one that’s not easily guessable.

And don’t use 123456 or the word “password” as your password; they are the top two passwords currently in use.

Finally, two more steps to protect yourself: First, look for the lock icon at the bottom of the site you are trying to access. It means all data is encrypted so no one else can get at it without your passcode. And second, a legit email will contain a disclaimer warning you not to send money without first validating the request. So hold on to your wallet.


(Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at