Mortgage scams have increased since 2022 from 14 incidents a month to 71, according to a study that scraped Better Business Bureau (BBB) complaint data.
Only 12% of the mortgage scam reports included financial data, but the average financial loss from those was $16,829, the report from BackOffice Pro found. Nationwide total losses reached $1.38 million.
The 407% surge — a fivefold increase — in mortgage scam reports over the last three years is likely to only get worse, because in the absence of stronger financial safeguards — especially the weakening of the Consumer Financial Protection Bureau — the landscape for fraud is improving.
“Most consumers have no idea how exposed they are. Without modern oversight and enforcement, the system is operating on trust that scammers are exploiting daily,” said BackOffice Pro Executive Vice President Rajeev Kumar. “It’s a dangerous repeat of the structural vulnerabilities we saw in 2008 — just with new tools.”
The company is a provider of mortgage services. For the study, it analyzed 670 mortgage-related scam reports extracted from the BBB Scam Tracker database (2015-April 2025). The data underwent cleaning and standardization, including the removal of some significant outliers that were incorrectly categorized as mortgage scams.
“We need to build defenses that anticipate where the vulnerabilities really are, not just where the headlines are.” —Rajeev Kumar, Executive Vice President, BackOffice Pro
Phishing accounted for 53.3% of all reported cases. These schemes range from impersonating title companies, lenders, or real estate agents and redirecting wire transfers during the closing process.
Some 65 cases were categorized as “other,” while 30 involved retail businesses, 25 were about advanced local fees, 20 involved a bank, 18 were about credit cards, and 16 were debt collection issues.
“The data doesn’t just show who’s being scammed — it shows how and why they’re vulnerable in the first place,” said Kumar. “Real estate deals now move fast, often with remote teams. But most processes weren’t designed with cybersecurity in mind.”
Indeed, the spike in mortgage scams hasn’t happened in a vacuum. A combination of economic pressure, digital transformation, and shifting borrower behavior has made the system more vulnerable to fraud — and more attractive to fraudsters.
Last year alone, one in every 123 mortgage applications showed signs of fraud. Identity misrepresentation and fake transactions such as falsified down payments are increasingly common, according to the company.
Also, thieves now use AI to generate fake documentation, realistic phishing emails, and synthetic identities that can bypass basic fraud filters. The rise of digital lending has reduced in-person verification, and that convenience has opened the door to new fraud entry points.
“We’re not just seeing more fraud — we’re seeing smarter fraud,” noted Kumar. “And it’s being driven by the same tech and market dynamics that are reshaping the mortgage industry itself.”
The problem, as Kumar sees it, is that mortgage ploys don’t cause a public panic like major data breaches.
“But that’s exactly why they’re being overlooked. We mistake silence for security,” he contended. “We need to build defenses that anticipate where the vulnerabilities really are, not just where the headlines are.”
