Fake Mortgage Preapproval Lender Scam via Wire Transfer
Fraudulent 'lenders' issue quick preapproval letters, then request an upfront wire transfer for fees, points, or an 'insurance deposit' before any real loan exists.
Part of: Fake Mortgage Preapproval / Lender Scam
Last reviewed: 5 July 2026
Wire transfers have a legitimate place in a home purchase, but only at closing, sent to a title or escrow company with independently verified instructions. This scam front-loads it: a fake lender issues a preapproval letter with none of the document checks real underwriting requires, waits until the buyer is invested in making offers, then claims a wire is needed to secure the rate or cover processing points. Because a wire usually cannot be recalled once received and withdrawn, the money is gone. The distinction that matters most is timing: no legitimate lender collects wired funds at the preapproval stage.
How this scam works on wire transfer
After a buyer submits basic financial details online, a fake lender issues a preapproval letter almost instantly, with none of the documentation checks a real mortgage underwriter would require. Once the buyer is excited and using the letter to make offers, the scammer says a wire transfer is needed to 'secure the rate,' cover 'processing points,' or pay a mortgage insurance deposit before closing — something legitimate lenders never collect this way at this stage.
Because wire transfers move funds directly between banks and typically cannot be recalled once received and withdrawn, the scammer disappears with the money and the buyer is left with a worthless preapproval letter, sometimes discovering the fraud only when a real lender or title company later flags the paperwork as fabricated during the actual closing process.
Common red flags
- Preapproval issued within minutes with no income or asset documentation review
- Request for a wire transfer to 'lock in the rate' or pay points before a formal loan application
- Wiring instructions arrive by email with no phone confirmation offered
- Lender has no verifiable NMLS (Nationwide Multistate Licensing System) registration
- Communication is only through email or text, with no licensed loan officer reachable by phone
- Pressure to wire funds quickly to avoid 'losing the rate' or the house
How to protect yourself
- Verify any lender's NMLS number through the NMLS Consumer Access website before proceeding
- Never wire money for 'points,' rate locks, or deposits based only on an email request
- Call the lender directly using a phone number you find independently, not one provided in the email
- Confirm wiring instructions by phone with a known contact before sending any funds
- Use a real estate attorney or title company to verify legitimate closing costs and timing
- Be wary of preapproval letters issued without any documentation review
How to report it
- Report to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint
- File a complaint with the FTC at reportfraud.ftc.gov
- Contact your bank's wire fraud department immediately if a transfer has been sent
- Report to the FBI's Internet Crime Complaint Center (IC3.gov)
Frequently asked questions
How is a wire transfer different from other ways I might pay mortgage-related fees?
A wire transfer moves funds directly and almost immediately between banks with no built-in reversal process once the receiving bank accepts it, unlike a credit card charge which can often be disputed. That speed and finality is exactly why fake lenders push for wire transfers over other payment methods.
What's the safest way to confirm wiring instructions are legitimate before sending a mortgage payment?
Call a phone number for the lender that you find independently through their official website or a prior, trusted communication — never a number provided in the same email containing the wiring instructions. Verbally confirm the account name, number, and amount with a real person before sending anything.
My wire already went out an hour ago — is it too late to do anything?
Contact your bank's wire fraud department immediately regardless of how much time has passed; some banks can still attempt a recall request with the receiving bank if funds haven't been withdrawn yet. Also file reports with IC3.gov and the FTC, since fast reporting occasionally helps even after a wire has settled.
Do legitimate mortgage lenders ask for a wire transfer before closing?
No. Legitimate lenders collect fees through structured escrow processes disclosed in official loan documents, not through a standalone wire request tied to a fast-issued preapproval letter.
Can a wire transfer sent to a fake lender be recovered?
Recovery is unlikely once the funds are withdrawn, though acting within minutes or hours and contacting both banks immediately sometimes allows a recall request before the money moves further.