#compliancemanagement--During Q1 2025 46.8% percent of transactions on a ~$80bn portfolio comprising of residential, commercial and business purpose loans had issues leading to a risk of wire & ti...
NEWPORT BEACH, Calif.: #compliancemanagement--During Q1 2025 46.8% percent of transactions on a ~$80bn portfolio comprising of residential, commercial and business purpose loans had issues leading to a risk of wire & title fraud. On average, problematic loans had 2.5 issues per loan which is a new record, indicating the lack of appropriate controls by closing agents and lenders to identify and fix issues.
Q1 2025 saw record-high risk levels for CPL validation related errors (10.8% of transactions) for critical data points such as borrower information, vesting / vested parties, non-borrowing parties on title, property addresses, borrower information and more. This is another example of a lack of accuracy between lender and title systems alongside the CPL issues that hit all-time high levels in the last quarter of 47.7% of transactions.
There were wire related errors at 8.4% of transactions in Q1, the 6th straight quarter with over 8% for this category. License issues remained at elevated levels from Q4 2024 to Q1 2025 due to entities having lapsed, terminated, or suspended licenses and inconsistent data when verified with registrars, insurance regulators and licensing bodies. 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.
Decision-ready data from trusted sources will remain a cornerstone of the mortgage and real estate finance industry. AI solutions have the potential to significantly enhance automation, collaboration, and process improvement, resulting in improved customer experience and pricing. Automation goals from lenders seeking efficiencies in their LOS, POS and during the real estate journey all require decision ready data and real-time verification using live repositories, these are essential for responsible and efficient AI initiatives.
Some additional context, during Q1 2025 where we saw further focus on wire fraud, title fraud and closing agent risk management including more attention to closing agent risk management at the GSEs. FundingShield received requests for data from many of its lender clients that sell to Fannie Mae who recently underwent Mortgage Origination Risk Assessment (MORA) Audits during Q1 2025.
Fannie Mae MORA Audit – Title Risk Focus:
The clients were undergoing typical Mortgage Origination Risk Assessment (MORA) audit requests. Fannie Mae had reached out to our clients, asking them to confirm the risk framework, measurement, and tracking the lender used to conduct transaction-level risk reviews of the closing agent, the title insurance firm, and transaction-specific details at the time of closing on each loan sold to them. This did not mean having a database of approved agents last updated “X” days, months, or years ago, but rather that the check was done at the time of closing and was transaction specific.
Implications:
Analytics Q1 2025 vs Q4 2024:
Fonte: Business Wire
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