The share of mortgage loans with issues that could indicate fraud declined in the second quarter of 2025, although it is still above levels seen in the second half of last year, Fundingshield's Wire Fraud Analytics report said.
During the period, nearly 46.63% of transactions analyzed in an $81 billion residential, commercial and business purpose loan portfolio were flagged for having at least one problem which posed a significant risk of wire and title fraud, Ike Suri, Fundingshield CEO, said in the report.
This compared with
On average, each problematic loan exhibited 2.2 issues. While improved from the record 2.5 issues in the first quarter, it still highlights "a troubling trend: existing controls by closing agents and lenders are proving insufficient to consistently detect and resolve these vulnerabilities before closing," Suri said.
Closing protection letter validation-related errors were the most common issue identified by Fundingshield, occurring in 9.4% of the transactions reviewed. These errors involved critical data points such as borrower information, vesting or vested parties, non-borrowing parties on the title, property addresses and more.
"This is another example of a lack of accuracy between lender and title systems alongside the CPL issues [a separate category] that were at 44.43% of transactions," Suri said.
But both were improved versus the first quarter, when CPL issues were found in 46.68% of transactions and CPL validation problems in 10.85%.
Wire-related errors were found in 8.57% of transactions, the seventh consecutive period over the 8% mark, Fundingshield noted. That was a 16 basis point increase from the first quarter's 8.41%.
Problems with licensure was found in 1.78% of the reviews, a 5.1% gain over the first quarter's 1.69%. These errors are "due to entities having lapsed, terminated or suspended licenses and inconsistent data when verified with registrars, insurance regulators and licensing bodies," Suri said.
"These persistently high levels combined with the CPL validation and key data element mismatch highlight the need for source data verification in workflows and for trusted data sets being used as part of critical processes," he added.
In his "key observations" section, Suri highlighted the
"Fraud in mortgage transactions can appear at multiple stages — from loan applications to closing, and even post-funding," he continued. "It's a systemic issue that requires proactive monitoring and remediation."
Suri noted that Fundingshield now processes between $3 billion and $4 billion in closings daily and has surpassed $4.5 billion in total transactions monitored to date.
"The increased scope on closing risk in [Fannie Mae Mortgage Origination Risk Assessment] audits is driving greater regulatory scrutiny, prompting lenders to adopt automated compliance and fraud prevention technologies," Suri said. "These tools enable lenders to apply consistent controls across all transactions — unlike traditional methods, which limited oversight to only a fraction of their loan volume due to high operational costs."
In a sign demand for these services are growing, another company which is involved in title fraud prevention, Certifid, just closed a $47.5 million Series C funding round, led by Centana Growth Partners.
The other investor in this round is Arthur Ventures, which led both
"The investment in Certifid felt like a natural fit given Centana's deep expertise in the identity and fraud prevention space," said Tom Cronkright, co-founder and executive chairman, in a press release. "They understand our mission and share our commitment to securing critical financial transactions."
Cronkright started the company after his title agency was a victim of wire fraud.
This new funding will allow Certifid to increase its capabilities in identity verification, transaction monitoring and secure payments, as well as grow its team, expand partnerships and accelerate the rollout of new security features.
Last year, Certifid prevented $1.3 billion in losses. To date, it has verified over 1 million mortgage payoffs and returned more than $100 million to fraud victims, the company said.
