Fundingshield reports an estimated $3 Billion in wire and closing fraud attempts in the first 4 months of 2018
Fundingshield reports an estimated $3 Billion in wire and closing fraud attempts in the first 4 months of 2018, triple the $1 billion reported to the FBI for all real estate related wire fraud losses for the first 9 months of 2017.
This report leverages Fundingshield’s industry-leading proprietary software, analytics and transaction database of wire account information and transaction closing history. Furthermore, this projection is specific to lender wire and closing fraud attempts, and does not capture the much higher volume of wire fraud attempts against consumers in housing transactions. Wire and closing fraud victims overwhelmingly underreport losses because of reputational risk concerns.
“The rising fraud attempts come while lenders expand their efforts to digitize their workflows (E-mortgage, POS integration, mobile applications; mostly origination efforts), increasing efficiency but at the same time magnifying risk to IT assets, closing and settlement processes,” shared Ike Suri, Chairman & CEO of Fundingshield.
Cyber criminals use crawlers, also known as software bots, with redundant schemes and hacks, to leverage phishing attacks, system invasions, and email compromises, all with a view to move funds to unauthorized parties. Financial services experienced 27 percent of all security incidents and 17 percent of attacks in 2017. More than 76 percent of the activity involved injection attacks, while nearly 10 percent involved reconnaissance activity as reported by IBM X Force Threat Intelligence Index 2018
It’s a matter of when, not if, for these breaches are all but inevitable at every lender. That was the message during the “Business Response to Cyber Risk” panel held at the Mortgage Bankers Association’s Commercial/Multifamily Servicing and Technology Conference in Miami May 20th to 23rd.
With recent large-scale data breaches at firms such as Equifax, the mortgage finance community has seen rising costs to manage closing-agent and funding risks and absorb the losses and costs of managing fraud incidents and claims. As Fannie Mae noted in 2017, losses from wire fraud go beyond the wire amount itself to include litigation fees and substantial investigation costs that exceed 100-person hours for a single fraud attack.
Fundingshield’s products find relevance and provide solutions on a cloud-based Plug n play foundation where we see three types of lender clients onboarding:
Lenders that are Proactive:Tech savvy, risk aware, and with ability to deploy and transform existing resources to stay ahead while leveraging technology-based solutions as a core part of their operating model.
Lenders Researching: Client with limited resources and who may be less teach savvy, have found Fundingshield to facilitate efficacy at a plug and play level.
Lenders that are Reactive: This type of clientele, has likely experienced a loss or severe disruption in work flow due to attacks. It is more than likely that they have had to work with various entities of Law enforcement, legal counsel, and other consults to try and reclaim funds.
Fundingshield is the market leader in wire fraud prevention, closing agent risk / compliance and vendor risk management automation. Fundingshield validates parties, documents and bank accounts at the loan level alerting those involved of possible fraudulent activity to avoid theft. Fundingshield’s cloud-based technology provides live controls at lower costs to deliver scalable solutions that easily integrate. Contact +1 800 295 0135 x2 or email@example.com to learn more about their services.