In the News
Presented by Frank Pellegrini, CEO, Prairie Title
Mortgage Security in the age of Cybercrime
Spoofing Mortgage Payoffs Comes to Light as Major Issue
The Internet offers many conveniences, including having billions of pieces of information at our fingertips at any time. That’s the good part. Unfortunately, there are bad aspects as well, including the proliferation of financial cybercrime. Our industry has always been attractive to scam artists because of the large amounts of money involved in real estate transfers. The ease with which information flows in the Internet age only has accelerated that trend, and people have taken notice.
A recent Gallup poll shows that cybercrime remains at the top of the list of Americans’ worries. Gallup notes that of 13 crimes measured, Americans continue to worry most about cybercrimes
Mortgage scams often have targeted consumers by delivering fake wiring instructions to home buyers, a troubling trend that continues today as this story from KOMO TV in Utah demonstrates. But spoofing, a serious threat aimed at industry professionals, has also come to the forefront with potentially disastrous consequences for those who are not diligent at all times about how they handle payoff notes.
In a recent white paper titled, Mortgage Payoffs under Siege, by Thomas Cronkright, CEO/Co-founder of CertifID LLC of Grand Rapids, Mich., the author lays out how spoofing happens and how real estate pros can thwart it. (You can download the white paper here.)
“Over the past six months,” Cronkright says, “the title and settlement industry has seen a sharp increase in the use of spoofed mortgage payoffs by cybercriminals. Knowing a vast majority of payoff letters get sent via fax, the cyber perpetrator creates payoff statements that look identical to those issued by the lending institution. These false statements are then faxed to the title or escrow company disbursing the transaction after closing.
“What to do?” the paper continues. “This scam underscores the need for remarkable diligence when requesting a mortgage payoff letter. If possible, fax or send an encrypted email to the lender requesting the payoff rather that trusting an online portal. When forced to use an online portal, confirm the accuracy of the bank account credentials before acting on them either through a phone call, secure message or another form of validation.”
|As we Promised
In the 4th quarter issue of ASSURANCE we published a shortened version of a presentation about leadership that I gave at the recent American Land Title Association convention. Click here to read the full piece.
That’s great advice and we practice those principles at Prairie Title every day. As inconvenient as it may seem, we must all take careful steps to confirm and verify every payoff letter we receive without exception. Our livelihoods depend on it.