Mortgage closing fraud continues to increase to and is reaching all-time highs while mortgage volumes are on a decline due to rising rates.


From The Trenches 

Cybercriminals are using sophisticated phishing and email system penetration strategies to find a transactions in the mortgage market where they can execute an attempt to defraud one or more parties to the loan transaction.  As the market volume has decreased, the percentage of transactions being attacked has spiked significantly.  Fundingshield is actively assisting law firms, working with regulators and law enforcement to help non-clients in their attempts to recover stolen funds.

 

Recent Fundingshield Lender Client Experiences:

The number of transactions flagged and fixed according to our clients closing party requirements spiked during the past month due to abnormal closing details, invalid CPL forms or bank accounts that cannot be verified.  Here are several areas where we have seen greatest opportunities arise for attempted fraud:

Business Email Compromise

  • These were the result of BEC (Business Email Compromise), phishing or email server penetration and compromise where the fraudster is altering wire instructions or used entities with seemingly similar names to a licensed entity and/or known settlement agents or the purchaser or seller.

Loan Origination System (LOS) Migration Exposure is target:

  • Another lender found themselves exposed during the middle of their LOS transition as cyber criminals found ways to exploit an environment that did not have redundant verifications or third-party oversight of their closing agent validation and funding controls.

 

Fundingshield is a Value Add Business Partner

The current market environment is rapidly compressing loan margins, loan processing costs have increased from $2500 to $7500 per loan and we are seeing significant the risks of theft, fraud or noncompliance are on the rise. Fundingshield’s Fintech services provides a cost-effective proven solutions to protect from losses, be compliant, reduce operational risks/costs and restore profits.