NMP - April 2017 - 28

✒

Beware! Wire Fraud
Phishing Scams
Are on the Rise
By Andrew Liput

I

APRIL 2017 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

28

n October and March of 2016, I wrote about the rise of
settlement agent wire fraud. The scheme involved
criminals hacking lender, attorney and title agent e-mail
addresses and changing wire instructions prior to
closing. When the new instructions are not validated the
criminals made off with the mortgage proceeds. Despite
these warnings, this crime scheme continues to spread. As
the market moves towards a purchase market and away from
refinances, the problems are accelerating causing great harm.
The latest incidents that have befallen lenders in 2017 have
reflected the same common theme. Hackers accessed a
lender's e-mail, either through a borrower's address, a loan
officer using a personal e-mail domain not protected by a
lender's network, or an attorney's e-mail. The scammers then
sent an e-mail, either to the title agent, attorney or to the
closing department of the lender including revised wiring
instructions. The wires were then sent to the criminal's bank
and not the intended recipient. In one case, which is now the
subject of litigation in Florida, a title company is accused of
neglecting to conduct appropriate internal data security
measures after it received a bogus wire instruction and sent it
off to a consumer who then wired the seller's proceeds to
someone else. With the money long gone, the seller is
seeking recovery against the agency and the buyer for their
alleged negligence.
To combat this crime, many lenders are taking an extra
step and checking the ABA routing number and bank account
number with the Federal Reserve Web site to verify that the
account is actually at the bank indicated. Others are sending
a verification of trust account to the settlement agent's bank
to verify that the account is truly a trust account in the name
and for the business of the title agent, attorney or other
closing professional.
Many title agents are sending lenders and attorneys their
title reports with cover letters containing language in bold
print instructing: We no longer send wiring instruction by email, please call our offices to verify the proper bank
information!
Phishing is not a new problem. There are industry articles
back in 2005 warning lenders about e-mail schemes designed
to access and steal NPPI. It is clear that this serious problem
is getting more widespread and invasive as technology has
advanced and criminals have become more resourceful and
bold.
At SSI, we maintain a database of more than 50,000
settlement professionals nationwide, with verified trust
account data that is verified through electronic authorizations
directly at each bank. None of our clients wire to any other
account. To date, we have monitored more than three million
closing transactions without one loss due to wire fraud.

Andrew Liput is CEO of Secure Insight, a risk
analytics firm offering vendor management services
addressing settlement agent risk. He can be reached
by e-mail at ALiput@SecureSettlements.com.

SPONSORED EDITORIAL

nmp news flash

continued from page 26

Zillow Chief Economist Svenja
Gudell. "Incomes have a way
to go to bring rental
affordability closer to
historical levels, but recent
gains are being met with
slowing rent appreciation, a
welcome sign for renters."
Closing Times for
Millennials' Mortgages
Becomes Faster

Millennials are not known to
sit around and wait for things
to happen, and that need for
speed appears to extend to
their home loan originations.
The closing time for the
mortgages of Millennial
borrowers decreased to 44
days, the shortest average
time to close since March
2016, according to new data
from Ellie Mae.
The average time to close a
purchase loan for Millennials
decreased from 46 days in
January to 42 days in
February, while time to close
a refinance loan also
decreased to 52 days in
February, down from 58 days
the month prior. The average
time to close FHA loans
decreased from 47 days in
January to 43 days in
February, while the average
time to close VA loans took a
steep drop from 57 days to 41
days.
Home purchases accounted
for 86 percent of all closed
loans from Millennials in
February, a slight uptick from
84 percent in January, while
refinances fell two percentage
points to 14 percent of all
loans to Millennial borrowers.
Share of conventional loans
remained unchanged from
January to February at 61
percent of loans, while FHA
loans increased to 36 percent
in February, up from 35
percent the month prior.
However, FICO scores
across all loan types dipped
in February to an average of
723, down from 724 in
January and their peak of 726
from August through October
2016. For purchases, the
average FICO score was 747

for a conventional loan, 690 for
an FHA loan and 745 for a VA
loan.
"Purchase loans are
increasing, indicating that
Millennials are continuing to
enter the first-time homebuyer
market," said Joe Tyrrell,
executive vice president of
corporate strategy for Ellie
Mae. "In addition, we saw time
to close decrease from 49 days
in January to 44 days in
February, which indicates that
our lenders are seeing more
efficiency as they embrace
mortgage automation."
Home Sellers Face
Challenge in Buying New
Residences

Today's home sellers are facing
an interesting dilemma: Where
can they buy a new residence?
In a survey of 800 real estate
agents working with the Redfin
brokerage, 65.6 percent of
respondents said that low
inventory was the greatest
challenge facing the sellers in
their markets. And the homes
that are available become very
popular very quickly: 57.2
percent respondents reported
being involved in at least one
instance of a home receiving 10
or more offers this year; a mere
1.8 percent of agents said they
yet to be involved in a bidding
war.
What can sellers do to ensure
they can move from their sold
home into a new place? Eileen
Lorway, a Redfin real estate
agent in the Boston area,
insisted that sellers move ahead
with their house sale before
securing the purchase a new
home.
"They should consider
temporary rental options, or
moving in with relatives after
they sell," she said. "Then they
will be able to take the time
they need to find their dream
house, know exactly what
they'll have to work with
financially, and won't end up
adding unnecessary
contingencies to offers, which
will give them a better chance
to get the home."


http://www.NationalMortgageProfessional.com

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