FS Newsletter 122: LOS shutdowns creating increased risk & headaches for lenders


Newsletter 122: January 5, 2018

As lenders move away from legacy Loan Origination Systems (“LOS”) or migrate from an unsupported, discontinued or retired LOS we highlight various loan closing procedure gaps that can be enhanced leveraging Fundingshield’s services.  During the transition phase Fundingshield provides a proven, flexible plug-n-play solution during this highly exposed period for operational & fraud risk.

Mortgage Lenders

Any Mortgage lender that is currently transitioning from a current LOS to another or going through entity wide system and reporting changes.  These lenders have to deal with aged, retired, patched systems lacking data security standards and support from LOS providers. While the market continues to evolve and innovate creating significant drag to operational efficiency for these parties.  This raw feedback (follow link) shows how bank and non-bank lenders alike scramble to fill the void and onboard new LOS providers.


Several lenders have a policy of not incorporating controls outside of a definitive LOS workflow which presents a challenge to organizations going through LOS migration or system development which can take months to years.

Current market risks of wire fraud, data breaches and social engineering of lender and closing agent operations have changed the type of controls and procedures required by lenders to assure good settlement.  In this transitory period, market, operational and technology risk continues to develop thus a need for a knowledgeable, nimble and efficient risk-partner exists.


Fundingshield has systems that can be securely deployed outside of the LOS workflow during system transitions with several ways to automate and integrate our services for lenders seeking to enhance their funding controls. The market has an abnormally high number of LOS being retired and FundingShield has been assisting a number of clients during this heightened period of fraud exposure during which lenders transition systems and procedures.

Waiting for lengthy periods of time for system integration to be complete ahead of enhancing funding controls in an environment of increased cyber based attacks on data and loan proceeds is a dangerous position.  Fundingshield offers plug-n-play solutions that can be deployed in days with minimal system integration and training.  Further, during transitory periods, lender technology and risk resources are focused on integration thus having a competent and secure partner to deliver critical funding support and verification will limit losses and reliance on strained resources.

About FundingShield

Fundingshield protects the Mortgage, Real Estate, Title and Legal Services industries from wire fraud, social engineering attempts, cyber based and settlement agent based wire fraud. Fundingshield’s cost & time effective solutions deliver the highest level of control & risk mitigation around cyber based threats of wire fraud / diversion helping you improve your bottom line.

Our Services 

Service Provider Compliance (SPC) Third party service provider and vendor oversight automation system for pre-close, closing and post-close service providers where the user can set their own vendor requirements and documentation frequency:

  • System automates document collection, compliance checks and audits as well as provides access to partners such as warehouse lenders, TPOs, brokers, correspondents, construction partners and more. 

Guardian Service – A loan closing transaction level monitoring system that provides a loan level certificate of assurance confirming good settlement, valid CPL coverage, wire account confirmation (using our WAVs system), approved and authorized closing parties, licensing of agents and more on every closing.

Wire Account Verification Service (WAVs) – Customers can leverage wire verifications instantly from our proprietary dataset of over 30,000 verified settlement party wire accounts.


For more information on FundingShield, to schedule a WebEx demo or to see what other services we provide the residential mortgage industry please email Sales@FundingShield.com or call (800) 295-0135 x2 www.FundingShield.com