Identity theft and income/asset fraud are the most prevalent individual mortgage fraud scams. Identity theft occurs when the real buyer uses the information of the victim, such as their Social Security numbers, birth dates, and addresses, to fraudulently obtain financing. For mortgage purposes, stolen pay stubs, bank records, tax returns, W-2s, and false employment verification letters may also be examples of identity theft. Borrowers can get a bogus mortgage on a property that they neither own nor occupy, and even property ownership records can be falsified.
A real estate transaction can result in identity theft at any time. It begins with malware or spyware being used by a con artist to gain access to your computer, email, or other accounts. This is typically carried out with the victim completely unaware by means of a phishing email or other dishonest means.
The identity thief can then monitor email communications between buyers and sellers, attorneys, real estate professionals, lenders, and others involved in the real estate transaction once they have gained access. Names and addresses, social security numbers, as well as banking and financial information—everything an identity thief needs to commit a variety of fraudulent crimes, particularly real estate identity theft—can be found in these emails.
Mortgage Fraud and Identity Theft Real estate identity theft can result in a wide range of devastating financial issues for the victim. An identity thief can commit mortgage fraud by applying for mortgages in someone else’s name with all of the relevant information and personal information in their possession. The thief can take equity lines out of the victim’s current home, buy new homes and refinance them, take out loans against the house, or even use a forged deed transfer to take the victim’s home.
Identity Theft Against Real Estate Brokers While the majority of cases of real estate identity theft involve taking on the persona of a buyer or seller, there are also those who attempt to steal the identities of real estate brokers.
By using a real estate broker or agent’s name, license number, and other credentials, an identity thief can trick unsuspecting customers into parting with money in the form of “fees” for a real estate transaction and then disappear forever.
Theft of an LLC’s identity, or the identity of a real business, is another form of title company fraud that is steadily growing. Cybercriminals target title companies so they can fraudulently acquire properties that are in default or being foreclosed on with the intention of reselling or refinancing the property.
A cybercriminal can effectively act as the owner or manager of a title company with sufficient sensitive information, sell property using the credentials of the company, take the money, and walk away.
Identity thieves and hackers don’t just target buyers and sellers. Employees of real estate brokerages and title companies are also frequently the targets of cybercriminals. To prevent identity thieves from gaining access to a network and protect sensitive data, all employees should receive comprehensive training. To increase safety and reduce risk, subscribe to follow your property data and any changes or updates that may appear without your knowledge.