During a period in which droves of Americans have taken to the housing market amid a pandemic, title fraud has skyrocketed.
According to a new report from mortgage and title fraud prevention company FundingShield, wire verification and ownership issues increased 31.5 percent between the second and third quarters of 2020.
“The U.S. Mortgage Industry continues to face wire and title fraud risk in an unprecedented manner during Q3 2020,” the report states.
“FBI’s IC3 report issued a warning to the market of increased third party fraud schemes targeting financial institutions and their customers of fake banking applications, websites, and app-based banking trojans that are swarming the market seeking to steal data and funds. The rise in the broader Financial Institution cyber risk environment coupled with the transaction level risks drive the continued demand for FundingShield’s services during this, which is cybersecurity awareness month.”
FundingShield’s data analytics “capture data at the transaction level” in order to report potential first or third-party fraud, misrepresentations, errors out of negligence, operational threats or cybersecurity threats.
The Federal Bureau of Investigation report referenced by the company showed a 50 percent increase in mobile banking since the beginning of 2020 amid the pandemic, opening up the potential for increased cyber fraud, and issued a warning to the public about increased risks.
In addition to title fraud, FundingShield’s report also noted a 30 percent rise in fraud and risk exposure in closing protection letter errors and issues, as well as a 90 percent increase in state licensing issues from the second quarter to the third quarter of 2020.
Overall, more parties working remotely across industries involved in monitoring fraud can increase the risk of fraud, Sun Title Agency CEO Thomas Cronkright told HousingWire in July.
“You’ve got remote distancing, so the teams just aren’t synced as tight as what they were,” Cronkright said. “A lot of the law enforcement at the federal level that helps with wire fraud are still working from home.”
Still, companies like Fidelity National Financial, a provider of title insurance and settlement services, are working to try and prevent fraud by educating consumers and creating programs like Fidelity’s startSafe program, which engages consumers within a secure digital workspace, rather than relying on email.