Fraud Watch: Real Estate Scams and the Millennial Home Shopper

According to the Federal Trade Commission, tech-savvy folks aged 40 and under are far from immune to scams and frauds. And most scams that hook them begin in an email. And the coronavirus economy is creating even more opportunities for fraud risk.

Image of a person looking nervously at a computer. Captioned: Real Estate Scams and the Millennial Home Shopper

A bogus email can appear to be a message from an ecommerce or business site, or even from the government. Millennials are twice as likely as people age 40 and older to report falling for a scam while browsing messages or social media posts and clicking on one of the advertisements. There are phony giveaways, the sale of tickets to fake events, and undelivered or counterfeit items. Young adults are also the targets of education, employment, and investment scams.

Some of these tricks can be life-changing. While online shopping fraud might involve just a few hundred dollars or less, millennials also face real estate scams, such as organized wire fraud and mortgage relief ploys.

Granted, millennials may be more likely to report losing money. Twenty- and thirty-somethings tend to be most likely to submit reports of money lost to some kind of scam, says the FTC.

The Pandemic Effect

As for financial impact by age, the 2020 pandemic has hit the under-40 group in the wallet, and disrupted young adults’ careers, much harder than it has hit their elders.

Many people under 40 were already dealing with student loans, a tight job market, the increasing use of temporary employment and a growing gig economy. And now they’re being targeted by a slew of coronavirus scams that aim to steal people’s financial data, their money, and their houses.

There have been tens of thousands of pandemic scams reported and tens of millions in losses through 2020, and some are related to housing. Be especially wary of mortgage or rental help offers that want up-front payments, whether by cash, check, or wire transfers. Official relief plans don’t charge up-front.

Young Homeowners Under Stress

Young homeowners who were thrilled to get their mortgages in recent years now may find paying those mortgages much more daunting than they’d expected. Know that homeowners (especially young and elderly folks) are struggling, swindlers are out and about with some clever ways to separate owners from their possessions.

Faux collectors are zeroing in on struggling homeowners with a variety of tricks:

  • “Mortgage relief lawyers” or forbearance experts tell homeowners they’ll represent them and get their mortgage modified.  
  • A company may send a stack of loan modification documents to the homeowner with a quitclaim in the pile.
  • Messages arrive telling the homeowner to send money to avoid foreclosure, sometimes even threatening to report recipients to the authorities.

Be wary of any third-party negotiators promising to make your mortgage easier to pay. Also beware of spoofed messages from known companies and agencies. You could see messages from banks, mortgage firms, Fannie Mae or Freddie Mac. You could hear from a nonprofit. Many fake messages are touting lower rates and foreclosure assistance. And some are spoofed — that is, they are not coming from the source they appear to represent. Always take care to verify messages from your mortgage agent, landlord, or property manager. Before verifying them, try to remember not to answer texts or click links, including links that say “remove my number” or “unsubscribe.”  

If you own your home, and new income stresses make your home loan hard to handle, initiate a direct call to your mortgage company. Set up a conversation with an expert there and find about any modification or forbearance options available to you. Ask how you will have to catch up once any loan deferral is over.

Pro tip: Many mortgages use escrow accounts to make tax payments for properties. This can be very helpful, as it means local property taxes are off the owner’s mind. But do check your local tax statement to be sure these payments are timely made, so you get the lowest available tax fees.

Mortgage Scams to Catch Unwary Home Buyers

Since Covid-19 got a foothold, the federal government has lowered interest rates, and many people are applying for new or refinanced home loans during what could be a real window of financial opportunity.

Unfortunately, first-time buyers are particularly attractive to scam artists. Plenty of swindlers, posing as mortgage representatives, are prepared to entice inexperienced buyers into wiring money. This underscores the importance of working with professional lenders and real estate agents. Absolutely choose the experts you work with by getting recommendations from homeowners you know — co-workers or trustworthy, experienced local homebuyers in your personal circle. And prepare for calls or messages with instructions on wiring your funds. You will have to wire funds into an escrow account. But fake websites and spoof email and phone accounts are easy to create. Watch for them.

Before sending money from one bank account to another, or e-signing anything, check the documents you already have from your company. Call the number on your paperwork to be sure the people asking you to wire money are who you think they are. Call once more right before sending money. New, different wiring instructions are red flags…verify! When you’re ready to make the transfer, double-check the account number, send the funds, then call your agent again to verify that the funds were received.

Finally, avoid using public internet connections. Do your financial transactions on your home computer, or invest in a portable internet system, such as a jetpack, to avoid risky online connections.

Millennials Targeted by Apartment Scammers

Some swindlers pretend to be apartment brokers and ask for application fees up front. They set up a presence on social media rental pages, real estate websites, or Craigslist, sometimes using mock images. Sometimes the website is real, but the contact information is superimposed, or it’s different in a message.

Others offer apartments that aren’t actually vacant or have mortgages in default. Or the promised amenities aren’t there. Review the listed amenities online versus what you agree to in your lease. The lease is controlling. And sign the lease before paying anything, or you could just be giving away your financial data. Millions of young rental applicants do, especially if they are apartment shopping without an agent, and especially in competitive city markets.

To avoid pitfalls, renters should always tour the desired apartment before filling out an online application or making a deposit. And they should study the property’s online presence and know who the actual property owner is before agreeing to anything, touring anything, or sending a deposit through any channels.

Finding Help: General Advice and Urgent Contact Information

Check for solid information on Covid scams, mortgage help, and rental assistance.

Borrowers can report suspicious mortgage experts to the Federal Housing Finance Agency online

If you’re concerned about a wire transfer, quickly call the wiring company, credit union, or bank that handled the money transfer and get their recommendation on how to proceed and file a report. It’s also important to report such scams on the Federal Trade Commission’s complaint site. Wire fraud is a federal crime. If you become a target for wiring scams, contact the FBI.


American Land Title Association: Millennials More Likely to Fall Prey to Fraud (2019). Studies Show Millennials Report Being Hardest Hit by Cyberscams (Sep. 2020).

Sarah Holder, Bloomberg City Lab, Everything Is a Lie, But Especially That Cheap Apartment Listing (Why Millennials are More Likely to Fall for Apartment Rental Scams) (July 2020).

Deborah Kearns, Bankrate: Avoid Real Estate Scams: The Four Most Common Mortgage and Real Estate Scams and How to Stop Them (May 2019).

CoreLogic: 2019 Mortgage Fraud Report (PDF).

The MReport: COVID-19 Scams Total More than $35M (Jun. 2020).

Photo credit: Josh Duke, via Unsplash.