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: firstname.lastname@example.org