Mortgage Application Fraud via Cashier's Check
How fraudsters exploit cashier's checks in mortgage and closing scams, leaving victims liable when the checks bounce.
Part of: Mortgage Application Fraud
Last reviewed: 1 June 2026
Cashier's checks are widely trusted, which fraudsters exploit in mortgage and closing scams. A scheme may involve a counterfeit cashier's check presented as 'earnest money' or a refund, or a fraudster pressuring a buyer to provide closing funds via cashier's check to a diverted recipient.
Because banks often make cashier's-check funds available before the check truly clears, victims can be left liable when a counterfeit check is later returned. Closing and earnest funds should be confirmed through verified channels, not rushed based on a check or altered instructions.
How this scam works on cashier's check
In one pattern, a buyer is told to bring a cashier's check for closing or earnest money to a recipient or office that turns out to be controlled by a fraudster, diverting the funds. In another, the victim deposits a counterfeit cashier's check sent as an 'overpayment' or 'refund' and is asked to send back part of the funds before the check bounces.
The bank may credit the deposited amount quickly, leading the victim to act before the check is dishonored. When the counterfeit is discovered, the bank reverses the credit, and any money the victim sent onward is lost.
Victims can be left owing the bank the full amount, on top of any funds already forwarded to the scammer.
Common red flags
- Pressure to deliver a cashier's check to an unverified recipient or office
- A cashier's check 'overpayment' with a request to send part of it back
- Urgency to act before a deposited check has truly cleared
- Closing instructions that differ from documented, verified details
- A recipient or refund source you cannot independently confirm
- Reluctance to verify the recipient through a known phone number
How to protect yourself
- Confirm closing and earnest recipients through verified, independent channels
- Never send funds back against a deposited check until it has truly cleared
- Ask your bank when a cashier's check has genuinely cleared, not just been credited
- Verify any refund or overpayment claim before acting
- Be cautious of unverified recipients for large checks
- If you suspect fraud, contact your bank and stop further payments
How to report it
- Report to the FBI Internet Crime Complaint Center at ic3.gov
- Contact your bank's fraud department immediately and report the check
- Report to the U.S. Federal Trade Commission at ReportFraud.ftc.gov
Frequently asked questions
Aren't cashier's checks guaranteed to be good?
Genuine cashier's checks are reliable, but counterfeits are common, and banks often credit funds before a check truly clears. If a check is later found to be fake, the bank reverses the credit and you are liable. Wait for true clearance before relying on the funds.