Could You Take a Mortgage But End Up With TWO?

The home mortgage market is on one of those tears. If you’re working in or around the industry you are experiencing the opposite of what the travel and hospitality industries have seen since last March. You’re rolling!

And it’s a win/win. Homeowners and prospective homeowners see the cost to own their piece of the American dream become a reality. Record low rates (shouldn’t we retire that phrase as redundant?) spur refinance and purchase activity.

But like every car driving fast, there are turns and speed bumps that can be dangerous, even fatal. Those of us in the industry know a few horrifying roads that can lead to disaster. They don’t get discussed publicly but they are lurking each and every day inside the building. One of those cliffs is particularly dangerous to all of us, the people in the industry and the homebuyers and owners we serve. So what is it?


Oh, we’re not talking about somebody hacking your Facebook account or using your charge card 6,000 miles from home. No, what we’re talking about is much more damaging that those things. And in high volume lending times it is the proverbial wolf at the door. Every door. Every day.

Let me explain.

When you get a mortgage, the lender wire transfers the proceeds to a settlement agent, who in turn wires funds to payoff the mortgage being replaced (refinance) or to the sellers to complete the purchase of a home. It’s a series of transactions dispersed electronically to satisfy debts or obligations. Hundreds of thousands of them every week around the country.

The threat? When closing departments at a mortgage lender respond to a wire request that looks legitimate but is actually a well disguised imitation from a hacker, often from eastern Europe.

Uh oh. Big uh oh. Cap locks UH OH, Bold UH OH.

On any given day, a mortgage lender can see one or two of these bogus requests, sometimes a handful or more. These pirates are fishing and all they are looking for is to catch one, just one. It will yield them $300,000 or more. And that money is NOT coming back.

So the mortgage being paid off (owners on a refi, sellers on a purchase) doesn’t, in fact, get paid off. Yet, you as the borrower just signed a for a new loan. In a matter of seconds, one person being duped into wiring funds to an imposter leaves the borrower with their old loan not paid off and the new one they just took. That’s TWO. That’s a problem. A BIG one.

This will happen today to someone, somewhere in the country.  Count on it. Fortunately, there is insurance and legal protections for all party’s but the end result is that we all pay when these thieves are successful. Some with money, some with their jobs.

Let’s be on-guard. Afterall, there is no mask or vaccine for this threat.




An image of a desk phone"OK, I did it, I’ll admit it, I looked straight at the eclipse. And, yes, they were right, you shouldn’t do that without the 3D glasses or the welder’s gloves. This is likely going to set me back a few days, at least until the dog and the cane arrive from Amazon so please leave a message and I’ll do my best to reply once shapes and spots start to look like words again.

Thank you."

Orignally posted August 23, 2017

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