Catching Payoff Fraud

ClosePoint USA CEO Christopher J. Brown talks about how his team recently caught an attempt of payoff fraud.

In today’s digital world, convenience comes with a catch — cybercriminals are constantly finding new ways to exploit real estate transactions. One of the fastest-growing threats in our industry is payoff fraud, and at ClosePoint USA, we’re here to help you understand it and, more importantly, avoid it.

What Is Payoff Fraud?

Payoff fraud occurs when a fraudster intercepts or impersonates a party in a real estate transaction — usually the mortgage lender — and tricks the title company into sending mortgage payoff funds to the wrong account.

Here’s how it works:

• A hacker gains access to email accounts involved in a real estate deal (often through phishing).

• They monitor communication and wait for the perfect moment — typically just before closing.

• The fraudster then sends fake mortgage payoff instructions, often appearing to come from a legitimate lender or trusted source.

• The title company unknowingly wires the funds to a fraudulent account.

• The real lender never receives the payoff, and the money is often gone for good.

Why It’s a Big Deal

This type of fraud can result in six- or seven-figure losses — and in many cases, the money is never recovered. It causes chaos for buyers, sellers, title companies, and lenders, often leading to delayed closings and expensive legal battles.

How to Prevent Payoff Fraud

At ClosePoint USA, we take security seriously. Here are some best practices we recommend for our clients and industry partners:

✅ Verify Instructions Directly

Never trust payoff instructions sent solely via email. Always call a verified phone number from the lender’s official website to confirm wire details. Do not use phone numbers provided in the email thread unless independently verified.

🔒 Use Secure Portals

We use encrypted, secure platforms to send and receive wire instructions. Avoid sending sensitive information over unprotected email whenever possible.

🕵️ Watch for Red Flags

Pay attention to things like:

• Sudden last-minute changes to wire instructions

• Unusual urgency or pressure to act quickly

• Slight changes in email addresses (e.g., @bankofamerlca.com instead of @bankofamerica.com)

📚 Train Your Team

Fraudsters rely on human error. Make sure everyone involved in your transactions — especially agents, assistants, and clients — is trained to recognize the signs of phishing and fraud.

🛑 Slow Down When Wires Are Involved

Wire transfers are nearly impossible to reverse. Take a few extra minutes to verify before sending — it could save hundreds of thousands of dollars. Closing with us? Just call us at 888-614-0050 to verify your wire instructions.

ClosePoint USA: Your Partner in Safe Closings

We know how much is at stake in every real estate transaction. That’s why ClosePoint USA combines expert knowledge with advanced security protocols to keep your deals safe from fraud — including payoff scams.

Have questions about payoff fraud or how we protect your closing? Contact us anytime.