FundingShield – Q4 – 2025 – Fraud Analytics With Commentary From FundingShield’s CEO Ike Suri
“It is my pleasure to share our company’s Q4 2025 Wire Fraud Analytics & Risk Report” – Ike Suri (FundingShield CEO):
Executive Summary
“To lenders, my call is clear: don’t wait for an audit finding or a breach to dictate change. Strengthen controls now by embedding real‑time validation of licensing, insurance, wiring, and title data. Doing so not only reduces fraud risk—it streamlines loan sale reviews, securitization readiness, and post‑closing workflows that drive cost and time pressures.”
— Ike Suri, CEO, FundingShield
During Q4 2025, 46.05% of transactions within a $100.5+ billion portfolio—spanning residential, warehouse-financed originations, non-QM, and securitization-bound collateral were flagged for issues posing significant wire and title fraud risks. Each of these problematic loans exhibited an average of 3.2 issues per transaction, which is an all-time high.
Q4 data continued to show elevated defects across key risk elements, with CPL discrepancies, wiring instruction mismatches, and licensing irregularities being flagged in transactions reviewed. These issues were amplified by a 58% increase in agent licensing issues. Further, there was a 10% increase in transactions that had at least one data inconsistency, which highlighted gaps between lender, title, and settlement systems. The persistence of these data defects and inconsistencies underscore how dependent closing workflows remain on obtaining accurate, verified information—particularly as lenders navigate tighter regulatory expectations and increased scrutiny around data governance.
Within this environment, FundingShield’s verification and remediation tools played a stabilizing role by validating licensing, insurance, wiring, and title related data directly at the source, helping institutions reduce exposure and maintain transaction integrity. In ongoing MORA audits conducted by Fannie Mae during 2025 FundingShield continued to see lender clients reach out to affirm the transaction level review and validation conducted by our firm of title insurance, issuing agents, licensing, good standing, recourse validation and more as part of loan level risk assessments from the GSE. This bolsters the need for logged, trackable, and clear review criteria and processes of closing agent risk for fraud, compliance and suitability on each loan by Fannie Mae sellers.
Q4 2025 recorded CPL related discrepancies in 48.78% of transactions, with defects concentrated in borrower data, vesting information, titleholder details, and property identifiers. Quarter-over-Quarter CPL issues remained elevated reflecting ongoing closing agent data accuracy and issues with enforceability of CPL and title policy protections. These patterns point to widening gaps between lender and title datasets, compounded by vendor oversight instability and cyber-driven data inconsistencies that complicated verification across closing workflows.
Wire instruction defects were present in 8.91% of transactions, marking the ninth consecutive quarter where wiring data remained a persistent vulnerability. Licensing irregularities drastically increased by 58% since Q3 2025 to a new record of 3.47%. Expired, suspended, or mismatched credentials across state registrars and insurance regulators highlight the continued need for independently verified source level data to ensure accurate identity and permission across title issuance, payoff, wiring, and settlement agent activity.
Key Risk Metrics:
Quarter-over-Quarter Comparison (Q4 2025 vs. Q3 2025)
License Issues: 58%
Wire Instruction Issues: -2.57%
Insurance Issues: 2.74%
Wire Instruction Issues: -2.57%
Insurance Issues: 2.74%
Entering 2026, several regulatory developments increased pressure on lenders to ensure data accuracy and vendor oversight—both central to wire and title fraud prevention. The Homebuyers Privacy Protection Act (effective March 2026) will limit borrower data circulation, reducing information that can be exploited in payoff and wiring frauds. As mentioned earlier, MORA audits continue to include title and closing agent diligence from Fannie Sellers.
Q4’s major cyber breach and fraud events highlighted how interconnected industry communication and data channels are –
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The SitusAMC breach created uncertainty around corporate accounting records, legal agreements, and certain client‑customer data that were compromised in the incident. Because so many major institutions rely on SitusAMC as a vendor for loan‑level data used in securitization, collateral, and diligence workflows, market participants noted that the disruption introduced new risks around data provenance and opened potential avenues for fraud in closing, payoff, or recording‑related processes.
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DOJ mortgage fraud conspiracy: The Department of Justice’s case against New Jersey investors and the owner of title agent Universal Abstract alleges a scheme to obtain mortgages on properties they did not actually own by manipulating ownership, title, and escrow representations, illustrating how compromised title and payoff data can be weaponized inside closing workflows whether or not the title company was complicit. Validating recourse, insurance coverage and permissions of title companies can save lending institutions from making an already bad situation much more harmful to their organization financially and reputationally.
Conclusion
Q4 underscored the convergence of cyber incidents, tightening regulations, elevated risk levels, and findings from our work with clients across $100.5+ billion in transactions. Rising licensing lapses, CPL failures, and wiring anomalies continue to expose weaknesses in data accuracy, third party oversight, and transaction integrity. The velocity of cyber events, the compounding impact of vendor layer breaches, and the growing time and cost of diligence reinforce that—especially in an AI enhanced operating environment—proactive verification before critical points in mortgage and real estate transactions is no longer optional but essential to avoiding exposure.
Across both upstream and downstream workflows, the message from Q4 is clear: independently validated data is becoming a prerequisite for operating safely in a more complex and evolving environment. FundingShield’s verifications and certifications not only prevent defects at the point of closing but also reduce friction across multiple stakeholders at various stages of the loan such as accounting, audits, loan sales, ratings, securitizations, and refinancings. Organized and auditable records help lower time and cost. By embedding real‑time validation and remediation into the process, institutions gain assurance that licensing, insurance, wiring, title data, and transaction data accuracy are validated before funds move. This proactive posture reduces fraud exposure, strengthens loan quality, and builds operational resilience—positioning lenders to meet rising regulatory expectations and navigate an increasingly challenging wire‑ and title‑fraud landscape with confidence.
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Ike Suri, Chairman and CEO of FundingShield, serves on the boards of the California MBA, MISMO, the MBA Risk Committee, and the MBA Fraud Committee. He also co‑hosts the industry’s leading mortgage technology conference, Mortgage Innovators, which showcases and fosters innovative companies and solutions shaping the future of the sector. In addition, he serves on the Advisory Board of the UT Dallas Naveen Jindal School of Management. Ike is regularly quoted across major industry and financial publications, including The Wall Street Journal, National Mortgage News, HousingWire, Bloomberg, and others.
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