Ed­i­tor’s Desk

National Mortgage News - - Contents -

Tra­di­tion­ally, mort­gage fraud is com­mit­ted by the ac­tual par­tic­i­pants in a real es­tate trans­ac­tion, like a ne­far­i­ous bor­rower or a rogue loan of­fi­cer or set­tle­ment ser­vices agent.

But a new kind of fraud is emerg­ing that ex­ploits the in­creased pres­ence and types of real es­tate data avail­able in the pub­lic do­main.

As this month’s cover story ex­plains, busi­ness email com­pro­mise scams and sim­i­lar fraud schemes give out­siders a way to weasel into trans­ac­tions with­out hav­ing a phys­i­cal con­nec­tion to any of the par­ties.

As the real es­tate and mort­gage process be­comes more dig­i­tal and less face-to-face, fraud­sters have more op­por­tu­nity to take ad­van­tage of a va­ri­ety of par­ties, in­clud­ing real es­tate agent, loan of­fi­cer, set­tle­ment agent and bor­rower. And the shift to a pur­chase market has only in­creased the risk of this type of fraud.

Vic­tims have lost as much as $3.7 bil­lion to all man­ner of email com­prise schemes since 2013, ac­cord­ing to data from the Fed­eral Bu­reau of In­ves­ti­ga­tion’s In­ter­net Crime Com­plaint Cen­ter.

For ex­am­ple, fraud­sters are able to use pub­lic sites to mon­i­tor a trans­ac­tion’s progress and at a crit­i­cal junc­ture, spoof a le­git­i­mate par­tic­i­pant’s email to send false wiring in­struc­tions to an in­di­vid­ual or busi­ness to steal money.

Re­cently, fed­eral law en­force­ment agen­cies seized $ 2.4 mil­lion, re­cov­ered an ad­di­tional $14 mil­lion and made dozens of ar­rests in a string of cases in­volv­ing real es­tate and mort­gage trans­ac­tions.

While the tremen­dous ef­fort and re­sources be­ing ded­i­cated to im­ple­ment­ing tech­nol­ogy that im­proves the cus­tomer ex­pe­ri­ence has cre­ated a sea change in the in­dus­try, the dan­gers of mort­gage fraud — and in par­tic­u­lar, schemes that take ad­van­tage of these new tech-en­abled ca­pa­bil­i­ties — can­not be ig­nored. Mort­gage com­pa­nies and their ven­dors must re­main vig­i­lant.

Like­wise, the po­ten­tial for abuse should not be seen as an ex­cuse to not em­brace these new tools. The ex­pec­ta­tions of bor­row­ers and em­ploy­ees alike have al­ready been el­e­vated and the mort­gage com­pa­nies that ig­nore that re­al­ity will get left be­hind.

Speak­ing of tech­nol­ogy in­no­va­tions, the 2018 Dig­i­tal Mort­gage Con­fer­ence is right around the cor­ner. It’s not too late to reg­is­ter. This year’s event will take place in Las Ve­gas and is set to be the big­gest and best yet. We look for­ward to be­ing your host at this truly rev­o­lu­tion­ary event!

Send your com­ments, ques­tions and story ideas to Ed­i­tor in Chief Austin Kil­gore: austin.kil­gore@source­me­dia.com

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