Fraud risks are increasing based upon the Federal Bureau of Investigation Internet Crime Report, which found that cyber-crime losses increased to a record high $12.8 billion in 2023.
The report found risks from wire fraud on 9.2% of transactions during the first quarter of 2024. The report found that nearly half, 48%, of $65 billion worth of portfolio loans processed during the first quarter of 2024 contained some form of vulnerability to wire and title fraud.
Some of these risks include lack of validation, nonexistent verification processes, system deficiencies created by numerous vulnerable endpoints, allowing wire and title risks to grow to an all-time high for lenders today. In total, CPL issues were found on 44.6% of all transactions. The vulnerabilities allow such bad actors to successfully gain knowledge of mortgage and real estate closings and thereby attempt to use fishing efforts to steal business emails and compromise the whole process to divert funds going to and out of escrow accounts. The report from Funding Shield showed that there was a higher risk from CPL validations, with 13.2% of transactions having the errors in states that were permitting attorney-only closes. These cases include when the attorney is handling both the title and the settlement work.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
Connect with Ralph on LinkedIn: https://www.linkedin.com/in/ralphaponte/