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Identity Fraud in Mortgage: The Threat is Real . . . and Growing

Fraud is not a new topic for the mortgage industry. But our familiarity with it has, perhaps, dulled our vigilance when it comes to a massive new threat. Wire fraud—perhaps more accurately called identity fraud—has exploded recently, both in frequency and complexity. It is no understatement to say that we, as an industry, are woefully unprepared for it. Worst of all, many of us don’t even acknowledge wire fraud as a top concern. If this describes you or your business, please consider the following a wake-up call to a trend that may already be an epidemic.

Let’s start with a few numbers:

  • $5.3 billion: the amount targeted by perpetrators via business email compromise in 2016 (source: FBI)  
  • 480 percent: the year-over-year increase in wire fraud scams reported by title companies to the Internet Crime Complaint Center (IC3) in 2016
  • 2,370 percent: the increase in identified exposed losses to the most typical of wire fraud scams between January 2015 and December 2016
  • 50: the number of states in which attempted wire fraud has been reported (source: IC3 and American Land Title Association)
  • 131: the number of countries in which attempted wire fraud has been reported (source: IC3 and ALTA)
  • 103: the number of nations to which fraudulent transfers have been rerouted (source: IC3 and ALTA)

Now consider one more number. All of these jaw-dropping statistics refer to reported cases. And yet, we’re learning that only 10 to 15 percent of fraud attempts are even reported. We’re just looking at the tip of the iceberg.  Read More