Issue 115: January 11, 2017



Total loan value of verified, validated and certified loan closings to end of year 2017


Total dollar amount of transactions identified as erroneous / fraudulent and then corrected and/or redirected with FundingShield Certification


Cost of FundingShield Certification versus Dollar Value of Potential Client Loss Exposure:


Top 25 mortgage lenders clients serviced


~ $80 Billion+


~ $15 billion+






The vast majority of mortgage lenders have ZERO INSURANCE COVERAGE

IN NEW YORK STATE for theft of settlement funds. The current insurance market conventions and policy language for coverage of real estate attorneys exposes lenders and investors in New York loans.


FundingShield’s services provide mortgage lenders risk and exposure mitigation in New York State Settlements by analyzing the closing Attorney’s Insurance Coverage for risk of “Theft of Client Funds”.   We have seen a large increase in client business related to this concern and are working with insurers to develop products and solutions around this specific gap in coverage.



Any mortgage lender or servicer who offers mortgage loans or purchasers loans in the State of New York.



Since no Closing Protection Letters are allowed in the State of New York, Mortgage Lenders must rely on the closing attorneys insurance to afford protection from theft of settlement funds. Errors and Omissions Insurance does not cover intentional acts and therefore does not cover any theft of settlement funds.  After FundingShield conducted an analysis across our platform of New York Attorney Insurance Policies, almost all Crimes Policies that do not have the additional, “Employee Theft of Client Funds/Property,” offer no protection to mortgage lenders.  A very small minority of Crimes Policies that have the additional, “Employee Theft of Client Property” do in fact offer protection from Employee Theft of Settlement Funds but this is policy dependent and varies even amongst the same Insurance Carriers.



Fundingshield’s services utilize in house document verification and data validation systems and procedures to enforce in large scale mortgage lenders’ (or investors) desire to reduce risk of loss and exposure by enforcing the use of New York State closing attorneys that possess the proper Crimes Policies that cover Employee Theft of Client Funds.  As of the date of issue of this newsletter this level of coverage is in our opinion the best option we see (viewers of this letter should consult with their counsel and prepare their own independent risk analysis). Attorneys that do not possess the necessary coverage are either instructed how to obtain the coverage or passed over for use in FundingShield’s capacity as agent for our mortgage lender or investor clients. Fundingshield also obtains detailed bank reference letters from New York State attorneys to assure that ALTA best practices are followed and that the history of each attorney is clear. Client’s of Fundingshield benefit from significant risk reduction while lending in the State of New York where only attorneys can conduct bank closings and no Closing Protection Letters are issued.


About FundingShield


FundingShield is a leading software enabled services company and the only provider of active loan level diligence for closings to the residential mortgage industry.  The Company’s array of services provides active verification and validation at the loan level for mortgage closings and detailed analysis of the documentation used. Our products & services include:


  • Verification and validation services at the loan level of closing documents for lenders, insurers and title companies
  • Confirmation of title insurance coverage for lenders backed by FundingShield’s GUARDIAN CERTIFICATE
  • Automated compliance data management systems for 3rd party service providers of lenders, title and state agencies & appraisers.
  • Pre/Post close QC QA and audit preparation.
  •               Cyber security, IT Theft, online brand reputation monitoring and brand protection, 24/7/365 tracking of key property, personnel &

vendors with threat reporting automation leveraging millions of public data points.

  • Specialized underwriting services to insurance companies and lenders as well as closing process audit reviews.

For more information on FundingShield, to schedule a WebEx demo or to see what other services we provide the residential mortgage industry please email or call (949) 706-7888