FundingShield: Fraud Risk Still High in Q2

(Image courtesy of FundingShield)

FundingShield, Newport Beach, Calif., released its second-quarter report, finding that 47.08% of transactions in a $74 billion portfolio including residential, commercial and business purpose loans presented some risk.

The report identified an average of 2.21 issues per problematic loan. However, that’s down about 1.2% from the first quarter.

FundingShield noted that the quarter returned near record-high risk levels for wire data and CPL validations–including aspects such as agent good standing, data accuracy between lenders and title systems and agent registration/active status.

CPL issues were found on 45.04% of transactions; CPL Validation issues were roughly flat at 9.8% of transactions. There was a 45% increase in CPL Validation issues year-over-year from Q2 2023 to the most recent quarter.

Another point of concern was a large increase in wire issues quarter-over-quarter in attorney-closing states.

Almost one in 10 transactions (8.8%) had wire-related issues–near the all-time high rate of 9.2% achieved last quarter.

“With a heightened cyberthreat environment with more cyberattacks resulting in more leaked private information, bad actors have more data to leverage to exploit gaps in controls in the mortgage and real estate market,” said Ike Suri, FundingShield CEO.

FundingShield pointed to spear phishing and business email compromise attacks as a specific risks.