Mortgage Scams plague Homeowners and Agents

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There are things you should know before you purchase your next house—even if you foresee that being years away. Take note of what’s in this article—and keep the notes where you’ll never forget where they are.

3BA hacker could fool you into thinking he’s your agent and trick you into sending him money—which you’ll never get back. It’s so bad the FTC even sent an alert warning consumers that Real Estate Agents email accounts are getting hacked.

  • Let’s say your Realtor’s name is Bill Baker.
  • Bill Baker’s e-mail account gets hacked.
  • The hacker observes Baker’s correspondences with his clients—including you.
  • Ahhh, the hacker sees you have an upcoming closing.
  • The hacker, posing as Bill Baker, sends you an e-mail, complete with instructions on where to wire your closing funds.
  • You follow these instructions.
  • But there’s one last step: kissing your money goodbye, as it will disappear into an untraceable abyss overseas.
  • This scam can also target your escrow agent.

It’s obvious that one way to prevent this is to arrange a home purchase deal where there are zero closing costs.

The scam is prevalent, perhaps having occurred thousands of times. It was just a matter of time until scammers recognized the opportunity to target real estate agents and their clients.

The lax security defenses of the real estate industry haven’t helped. Unlike the entire financial industry who have encrypted communications, the real estate industry is a hodgepodge of free e-mail accounts and unprotected communications.

In addition:

  • Realtors, so often on the go and in a hurry, frequently use public Wi-Fi like at coffee houses.
  • Anyone involved in a real estate transaction can be hacked, such as lawyers.

Preventing the Scam

  • Eliminate e-mail as a correspondence conduit—at least as far as information on closings and other sensitive information.
  • On the other hand, you may value having “everything in writing,” and e-mail provides a permanent record. In that case, use encrypted email or some setup that requires additional login credentials to gain access to the communication.
  • For money-wiring instructions, request a phone call. And make this request over the phone so that the hacker doesn’t try to pose as your Realtor over the phone.
  • Any e-mailed money instructions should be confirmed by phone—with the Realtor and the bank to send the money to.
  • Get verification of the transfer ASAP. If you suspect a scam, have the receiving bank freeze any withdrawal attempt of the newly deposited funds—if you’ve reached the bank in time, that is.

Robert Siciliano personal and home security specialist to BestHomeSecurityCompanys.com discussing burglar proofing your home on Fox Boston. Disclosures.

Mortgage Brokers put Client Data at risk

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Your private information may not be safe with your own mortgage lender, even a small one, says cybersecurity firm HALOCK Security Labs. The leak may occur when data goes from applicant to lender.

4DSeventy percent of the 63 U.S. mortgage lenders that HALOCK investigated allowed applicants to send private and financial data (like tax documents) as e-mail attachments—over unencrypted e-mail. Seventy percent also promote faxing sensitive data—not nearly as secure as encryption.

While more than 40 percent provided a snail mail option, only 12 percent offered encryption. Several survey participants, when the subjects were asked why they didn’t offer a secure e-mail portal, replied it was an issue of what the applicant was “most comfortable with.” (Certainly, who’d be comfortable with a leak of their most private information?)

While lenders place customer comfort ahead of security, they fail to realize that customers have been steadily losing confidence in their banks’ commitment to privacy.

Another consideration is whose comfort is really at issue? In a study, one former mortgage lender stated that it was a time hassle to explain to customers about secure portals; unprotected e-mail was quick and convenient.

But it’s well-worth the time to hassle with this, says security expert Graham Cluley. Regular e-mail, by definition, is non-secure.

There’s no shortage of methods to send e-mail securely. It’s just that they’re underutilized by organizations. Decision makers want to make things easy for customers, but this doesn’t have to be at the expense of their security.

Security measures that are customer-friendly exist. Bank customers are more demanding than ever for security, even though they usually do not understand about encryption. What bank wants a weak link in the form of a gaping hole through which customer data can leak? An ounce of prevention (secure portal log-in) is worth a pound of cure (identity theft).

Robert Siciliano is an Identity Theft Expert to AllClearID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen See him knock’em dead in this identity theft prevention video. Disclosures.

Identifying Devices can stop Mortgage Fraud

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What is mortgage fraud? The act of intentionally facilitating the use of, or using, any misrepresentation, misstatement or omission in a deliberate manner, being aware of the same to contain such, during a mortgage lending process, with the aim that the mortgage lender, borrower or any other participant to the mortgage lending process relies upon it.

8DSometimes mortgage fraud involves identity theft. This means consumers must be leery of people who may purchase a house in their name. Today’s lending standards are much more lax than they were three decades ago, creating more opportunities for scams.

First time home buyers, low income buyers, naïve buyers and illegal immigrants are often targets of predatory lenders.

Be aware of lenders who:

  • Target poor neighborhoods
  • Offer financial incentives for providing employment records
  • Offer financial incentives to find purchasers
  • Practice double closings: The buyer signs several mortgages on the same home which quickly settle, thus preventing lenders from catching wind of the fraud.

“Demand for consumer financing in the U.S. is growing at more than 5 percent per year, challenging lenders to adapt to rapid customer acquisition and an ever-changing environment,” points out iovation Director of Business Development Steve Hanson. He adds: “Therefore it’s essential that lenders stay apprised of the latest industry developments and regulations so they can develop customized strategies that benefit their clients and business.”

A giant step in putting a plug in mortgage fraud is to identify the devices responsible for committing fraud.

With a combination of advanced device identification, real-time risk evaluation and shared device reputation, iovation provides protection from fraud to online businesses and their end users.

iovation’s device reputation databases is the largest in the world, protecting over 10 million transactions, halting an average of 200,000 fraudulent activities on a daily basis.

Robert Siciliano, personal security and identity theft expert contributor to iovation. He is the author of 99 Things You Wish You Knew Before Your Mobile was Hacked! See him knock’em dead in this identity theft prevention video. Disclosures. For Roberts FREE ebook text- SECURE Your@emailaddress -to 411247

Mortgage Fraud and Identity Theft: Like Chocolate and Peanut Butter

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Robert Siciliano Identity Theft Expert

You don’t need to own a house to become a victim of mortgage fraud. Heck, you don’t even need to be older than 3 to be a victim. As long as the thief has a Social Security number, they can apply for loans in your name.

Lexis-Nexis Mortgage Asset Research Institute in Chicago shows that the incidence of fraud in 2009 increased 7 percentage points over 2008’s levels. In 2008, fraud reports rose 26 percentage points from the previous year. The institute collects and provides data – suspicious-activities reports, or SARS – to subscribers, including mortgage lenders. If you want to compare numbers, there were 67,190 such reports collected in 2009, compared with 63,713 in 2008, and 46,717 in 2007. The 2009 increase was small, but officials say they believe a lot of scam artists are going high-tech.

Law enforcement activities surrounding mortgage fraud across the U.S. have resulted in the arrest of thousands, according to reports. The utility of Social Security numbers as a means to obtain credit fuels the pervasiveness of mortgage fraud.

Some of the most devastating instances of mortgage fraud involve identity theft. Consumers not only have to be leery of questionable mortgage lenders, but also of others who might buy a home in their name.

Data from the U.S. Treasury Department’s Financial Crimes Enforcement Network has revealed that instances of suspected mortgage fraud have risen by 1,000 percent over the past six to seven years, reported the article in thisisyourmoney.co.uk, which went on to say the FBI’s financial crimes section has seen an 800 percent increase in its case load since 2003.

The apparent spike in mortgage fraud reveals one more line of attack that thieves exploit to hijack the financial identities of consumers.

The results of a research investigation by the Federal Bureau of Investigation recently revealed an apparent, significant upward trend in the incidence of mortgage fraud. Furthermore, homeowners who have Home Equity Lines of Credit (HELOCs) are prime targets for financial fraud, suggested a related statement from the Identity Theft Assistance Center (ITAC).

The best way to combat the threat is to transform Social Security numbers into something useless to thieves, who use these universal identifiers to obtain financial identities. Social Security numbers’ de facto role as universal identifiers has fueled a massive increase in financial fraud—simply because these numbers allow criminals to assume others’ identities. Given the scope of financial fraud, which costs billions of dollars every year, consumers need a way to deprive thieves of the ability to gain access to someone else’s finances. They must implement measures that render those Social Security numbers useless to thieves.

Invest in Intelius identity theft protection and prevention. Not all forms of identity theft can be prevented, but identity theft protection services can dramatically reduce your risk. (Disclosures)
Robert Siciliano Identity Theft Speaker discussing the Social Security numbers on Fox News.

Identity Theft Protection Expert and One You Security: Research Reveals That Usability of Social Security Numbers Enables Mortgage Fraudsters

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(SARASOTA, Fla. – July 30, 2008 – One You Security) The results of a research investigation by the Federal Bureau of Investigation recently revealed an apparent, significant upward trend in the incidence of mortgage fraud. Furthermore, homeowners who have Home Equity Lines of Credit (HELOCs) are prime targets for financial fraud, suggested a related statement from the Identity Theft Assistance Center (ITAC). The best way to combat the threat is to transform Social Security numbers into something useless to thieves, who use these universal identifiers to obtain financial identities, said Robert Siciliano, widely televised and quoted identity theft protection expert and chief security analyst for One You Security, LLC.

"Social Security numbers’ de facto role as universal identifiers has fueled a massive increase in financial fraud—simply because these numbers allow criminals to assume others’ identities," said Siciliano. "Given the scope of financial fraud, which costs billions of dollars every year, consumers need a way to deprive thieves of the ability to gain access to someone else’s finances. They must implement measures that render those Social Security numbers useless to thieves."

Subscribers to One You Security receive newsletters and special alerts from Siciliano. Through these, they get the latest information on data breaches and learn more about identity theft prevention. Chief security analyst for One You Security and a member of the Bank Fraud & IT Security Report‘s editorial board, Siciliano regularly discusses data security and consumer protection on CNBC, on NBC’s "Today Show," FOX News Network and elsewhere.

Released in April of 2008, the FBI’s 2007 Mortgage Fraud Report found that "Suspicious Activity Reports (SARs) from financial institutions indicated an increase in mortgage fraud reporting" in 2007. The year-over-year increase in SARs was 31 percent, according to the report, which went on to note that there is no central repository for mortgage fraud complaints in the U.S. Additionally, the report revealed that the total dollar impact of mortgage fraud is unknown, but that the losses associated with just 7 percent of SARs in 2007 was $813 million.

A July 8th news release from ITAC noted the FBI report’s attention to an emerging, related crime: home equity credit fraud. Consumers with HELOCs should regularly check them for suspicious activity and unaccountable discrepancies in balances, according to ITAC, whose announcement was reported in The New York Times on July 27.

"How do thieves obtain credit?" asked Chris Harris, president and CEO of One You Security. "They do so by assuming the identity of another person, and it’s largely the utility of Social Security numbers that allows them to do so. Financial fraud related to identity theft is in fact dependent on this, but the effect of One You’s service functionally strips Social Security numbers of this utility, leaving criminals with nothing but a bunch of nine-digit numbers that no longer give them access to would-be victims’ financial identities."

Consumers who choose One You Security do so in part because the company strives to transform their Social Security numbers into meaningless strings of digits of no use to thieves. The firm backs all its offerings with a 100 percent service guarantee.

The YouTube video below shows Siciliano on FOX News Network, where he explains how the ubiquity of Social Security numbers as universal identifiers helps thieves online and off-line. A collection of videos at VideoJug features Siciliano sharing advice on how consumers can protect themselves from identity theft and fraud.

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About One You Security, LLC

Sarasota, Fla.-based One You Security‘s mission is to eliminate the threat and consequences of identity theft. For just $10 per month, anyone can sign up for One You Security’s identity theft protection service, a proactive, preventative approach whereby the company activates and manages its customers’ fraud alerts with major credit bureaus. Subscribers also receive full access to ongoing education from identity theft protection expert Robert Siciliano, chief security analyst for One You Security, which backs up its promise to protect clients’ financial identities with a 100 percent service guarantee. To sign up for One You Security, dial 1-800-434-2010.

About IDTheftSecurity.com

Identity theft affects us all, and Robert Siciliano, CEO of IDTheftSecurity.com, chief security analyst for One You Security, and member of the Bank Fraud & IT Security Report‘s editorial board, makes it his mission to provide consumer education solutions on identity theft to Fortune 500 companies and their clients. Author of "The Safety Minute: 01" and leader of personal safety and security seminars nationwide, Siciliano has been featured on "The Today Show," CNN, MSNBC, CNBC, "FOX News," "The Suze Orman Show," "The Montel Williams Show," "Maury Povich," "Sally Jesse Raphael," "The Howard Stern Show," and "Inside Edition." Numerous magazines, print news outlets, and wire services have turned to him, as well, for expert commentary on personal security and identity theft protection. These include Forbes, USA Today, Entrepreneur, Woman’s Day, Mademoiselle, Good Housekeeping, The New York Times, Los Angeles Times, Washington Times, The Washington Post, Chicago Tribune, United Press International, Reuters, and others. For more information, visit Siciliano’s Web site, blog, and YouTube page.

The media are encouraged to get in touch with any of the following individuals:

Chris Harris
President & CEO of One You Security
PHONE: 941-342-0500 (x231)
chris@oneyou.com
http://www.oneyou.com

Robert Siciliano
CEO of IDTheftSecurity.com
Chief Security Analyst for One You Security
PHONE: 888-SICILIANO (742-4542)
FAX: 877-2-FAX-NOW (232-9669)
Robert@IDTheftSecurity.com
http://www.idtheftsecurity.com

Brent W. Skinner
President & CEO of STETrevisions
PHONE: 617-875-4859
FAX: 866-663-6557
BrentSkinner@STETrevisions.com
http://www.STETrevisions.com
http://brentskinner.blogspot.com

Identity Theft Can Lead to the Most Devastating Instances of Mortgage Fraud—Identity Theft Expert and Speaker on Personal Security

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(BOSTON, Mass. – April 4, 2007 – IDTheftSecurity.com) The Federal Bureau of Investigation and the Mortgage Bankers Association (MBA) have recently added to their joint efforts against mortgage fraud. Robert Siciliano, a widely televised and quoted personal security and identity theft expert, encouraged their cooperation and pressed for more action. According to Siciliano, identity thieves can be behind the most devastating instances of mortgage fraud.

“The most devastating instances of mortgage fraud are mixed with identity theft,” said Siciliano. “Imagine not only having to beware of shyster mortgage lenders, but of someone else getting a home in your name. I encourage law enforcement agencies and the banking industry to take as much action as possible.”

President of IDTheftSecurity.com, Siciliano leads Fortune 500 companies and their clients in workshops that explore consumer education solutions for data security issues. On its Web site, the Privacy Learning Institute has featured Siciliano, a longtime identity theft speaker. Author of “The Safety Minute: 01,” He has discussed identity theft and data security on CNBC, on NBC’s “Today Show,” FOX News, and elsewhere.

In response to a near doubling of yearly mortgage fraud–related Suspicious Activity Reports (SARs) since 2004, the FBI and the MBA entered into an agreement to combat Mortgage Fraud. According to a March 8th news release, the law enforcement agency and lending association will make a Mortgage Fraud Warning Notice available.

Mortgage fraud received much attention in March:

On March 29th Associated Press reported that Beazer Homes USA Inc. had “received a grand jury subpoena for documents as part of a federal investigation of possible fraud in the company’s mortgage lending practices and other financial transactions.”

A report to be released in April by the Mortgage Asset Research Institute is expected to show increases in mortgage fraud across the nation. According to a March 28th article in The Salt Lake Tribune, the report will rank Utah as No. 1 in mortgage fraud for 2006 (the year the report analyzes).

The March 28th edition of the Boston Herald reported statements from the Massachusetts Attorney General Martha Coakley. Under existing laws in the state, lenders that are not banks commit only a civil offense with mortgage fraud. The AG’s proposal, if adopted, would subject these lenders to criminal charges for a widespread form of the activity.

A March 13th article in The Sun News reported that South Carolina’s Department of Consumer Affairs has called for a “crackdown on mortgage fraud.”

“These and other efforts to put a stop to mortgage fraud are commendable,” concluded Siciliano. “But we must take more action. The prevalence of identity theft makes recent increases in the filing of SARs all the more worrisome. We must track down, and shut down, not only mortgage fraudsters, but identity thieves. The last thing we want is for the two to exploit their synergies.”

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About IDTheftSecurity.com
Identity theft affects us all, which is why Robert Siciliano, president of IDTheftSecurity.com, makes it his mission to provide consumer education solutions on identity theft to Fortune 500 companies and their clients. A leader of personal safety and security seminars nationwide, Siciliano has been featured on CNN, MSNBC, Fox News, “The Suze Orman Show,” “ABC News with Sam Donaldson,” “The Montel Williams Show,” “Maury Povich,” “Sally Jesse Raphael,” and “The Howard Stern Show.”

Visit Siciliano’s Web site, www.IDTheftSecurity.com; blog, www.realtysecurity.com/blog; and YouTube page, http://youtube.com/stungundotcom.

The media are encouraged to get in touch with Siciliano directly:

Robert Siciliano
Personal Security Expert
PHONE: 888-SICILIANO (742-4542)
FAX: 877-2-FAX-NOW (232-9669)
Robert@IDTheftSecurity.com
www.idtheftsecurity.com

The media may also contact:

Brent W. Skinner, President
STETrevisions
PHONE: 617-875-4859
FAX: 866-663-6557
BrentSkinner@STETrevisions.biz
www.STETrevisions.biz