A survey of almost 50,000 mortgage settlement agents indicates wire/cyber fraud is common in the mortgage process. While most agents say they have insurance to cover the risk, they also report banks usually do not require evidence of that insurance before engaging with them. This despite the risk to lenders of losing their money in a fraudulent transactions, potentially leading to complex litigation.
20% said over the last year they’d been victims of wire fraud or attempted cyber fraud to intercept bank proceeds and 31% said they’d seen fraud in someone else’s transaction.
“Although only twenty-four percent (24%) of settlement agents were asked by lenders to provide evidence of cyber insurance coverage, seventy-two percent (72%) have purchased and carry coverage in the event of a loss.”
These numbers highlight the growing exposure enterprises face from partners and vendors that may experience hacks but do not have adequate insurance. In this case, it appears settlement agents are moving in the right direction, but banks are behind in mitigating risk to their transaction chains.
See the survey from Secure Insight, a nationwide wire fraud and mortgage closing fraud risk management prevention company.