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FundingShield Q2 2025 Wire Fraud Risk Report Showing Nearly Half of Transactions at Risk
FundingShield Q2 2025 Wire Fraud Risk Report Showing Nearly Half of Transactions at Risk

Business Wire

time2 days ago

  • Business
  • Business Wire

FundingShield Q2 2025 Wire Fraud Risk Report Showing Nearly Half of Transactions at Risk

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--During Q2 2025, nearly 46.63% of transactions within an approximately $81 billion portfolio—spanning residential, commercial, and business-purpose loans—were flagged for issues that posed a significant risk of wire and title fraud. On average, each problematic loan exhibited 2.2 issues, marking a new record and highlighting a troubling trend: existing controls by closing agents and lenders are proving insufficient to consistently detect and resolve these vulnerabilities before closing. 'As fraud risks and regulatory expectations grow, we must strengthen controls around data accuracy, third-party oversight, and transaction integrity. These needs are reflected in FHFA guidance, GSE selling guides & MORA Audits, and compliance standards." The mortgage and settlement services industry continued to face heightened scrutiny around fraud prevention, data integrity, and closing process controls. FundingShield proactively identifies and blocks risks before funds are ever transferred, thus how we are able to report these metrics. This approach is key to preventing wire fraud by ensuring that only verified, authorized parties are involved in the disbursement process and allows our solutions to be utilized by Banks, Credit Unions, Law firms, Disbursement Agents, Warehouse Lenders, Non-QM lenders, Private credit funds, PE Firms and direct lenders among others involved in US real estate and finance. Q2 2025 saw consistent elevated levels for CPL validation related errors (9.4% 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 are at 44.43% of transactions. There were wire related errors at 8.57% of transactions in Q2, the 7 th straight quarter with over 8% for this category. License issues remained at elevated levels of 5.1% from Q1 2025 to Q2 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. Quarter-over-Quarter Comparison (Q2 2025 vs. Q1 2025) License Issues: 5.11% Wire Instruction Issues: 1.97% Insurance Issues: 103.81% Key Observations Recent initiatives by federal regulators and housing finance authorities have reinforced the importance of proactive fraud detection and data integrity: Fannie Mae, in collaboration with Palantir, has launched advanced analytics programs to detect fraud and anomalies in loan data, reflecting a broader shift toward real-time risk monitoring. FundingShield issued a press release discussing our alignment with the FHFA's stated goal of reducing fraud in the mortgage market. The FHFA has emphasized the need for stronger controls in the closing process, particularly in light of increased fraud activity in both residential and multifamily lending. These efforts align with existing compliance requirements under the Dodd-Frank Act, CFPB service provider oversight rules, and GSE seller/servicer guidelines, all of which require lenders to ensure that third-party service providers are vetted and monitored. FundingShield has been cited in many recent MORA Audits done by Fannie Mae on their sellers seeking validation of transaction level and controls of closing agent data, licensing, good standing and enforceability of claims should the need arise. These trends underscore the need for source data verification and the use of trusted, independently validated datasets in closing workflows. Without these controls, lenders face increased exposure to fraud, compliance violations, and post-closing recovery challenges. CPL validation is an example of a way that supports these mandates by providing a verifiable control that confirms the legitimacy of the closing process and the parties involved. Conclusion As fraud risks and regulatory expectations grow, the mortgage industry must strengthen controls around data accuracy, third-party oversight, and transaction integrity. These needs are reflected in FHFA guidance, GSE selling guides, and federal compliance standards. FundingShield supports these efforts by providing real-time validation of closing agents, licensing, insurance, and transaction data—helping institutions meet regulatory requirements, reduce fraud exposure, and improve loan quality through trusted, independently verified data.

How two new government policies could help make housing more affordable in Nashville
How two new government policies could help make housing more affordable in Nashville

Axios

time2 days ago

  • Business
  • Axios

How two new government policies could help make housing more affordable in Nashville

Housing stakeholders in Nashville hope two new policies — one at the federal level and another at the local level — play at least small parts in making homeownership more affordable and accessible. Why it matters: No single policy will magically solve the city's affordability crisis, but every drop in the bucket helps. Experts say the new policies could especially benefit new homeowners. Driving the news: The Federal Housing and Finance Administration announced a new policy allowing lenders to factor in a prospective homebuyer's rent payment history when approving a mortgage application. Up to this point, lenders used the FICO system, which considers a borrower's credit card and loan history when calculating their creditworthiness. Experts say the old system gave FICO a monopoly, and that adding in the new VantageScore credit score option creates competition that should lower fees for borrowers. The big picture: National Realtors Association chief advocacy officer Shannon McGahn applauded the policy shift, saying it "better reflects how today's consumers manage their finances." FHFA director Bill Pulte took a victory lap after the announcement and credited President Trump for the policy change. He says the competition will help homeowners. The policy will take some time to be implemented as FHFA works out administrative details. What she's saying: Christi Wedig, a loan originator with CMG Home Loans, tells Axios the FHFA policy switch should help borrowers like young people and immigrants who haven't taken out a loan or a credit card. "I think it's going to be really helpful across the country, and particularly here in Nashville," she says. "Rent is not cheap here. If you're paying $2,500 to $3,000 a month, you deserve some impact on your credit score." Yes, but: There are also risks since a single missed payment for a utility bill or rent didn't impact a person's credit score in the past. There's also the question of whether a landlord reports successful rent payments to VantageScore, something a local mom and pop landlord may not do. Wedig says it's important renters make sure their payments are verifiable through transaction history such as checks, electronic transfers or Venmo. Renters can register their own payment history through third-party companies to boost their VantageScore rating, although that service typically costs money. Metro approves new multi-family construction rule Zoom in: At the local level, Metro Council passed legislation last week that updates codes regulations to allow a multi-family building to be constructed with a single staircase. The policy applies to buildings up to six stories. Homebuilders say the policy will significantly lower their costs, which should benefit both renters and condo buyers. Between the lines: Advocates, such as Metro Councilmember Rollin Horton, say the single-stair design is cost effective and "just as, or even more safe" for residents. The state passed enabling legislation allowing local governments to implement the new code. Council members collaborated with the Fire Marshal's office, Codes Department and Planning Department to create the policy.

Jumbo vs. conventional loans: What's the difference?
Jumbo vs. conventional loans: What's the difference?

Yahoo

time4 days ago

  • Business
  • Yahoo

Jumbo vs. conventional loans: What's the difference?

Key takeaways A jumbo loan is actually a type of conventional loan — just bigger than usual, as the name implies. Because they exceed the loan limit set by the Federal Housing Finance Agency (FHFA), jumbo loans are considered nonconforming and have stricter lending guidelines. Conforming loans of lower amounts have less stringent credit criteria and lower down payment requirements. Overview: Jumbo loans vs. conventional loans A conventional loan is a mortgage that's originated and financed by a private lender, rather than the federal government. By that definition, a jumbo loan can actually be a type of conventional loan, so it's not exactly an apples-to-apples comparison. A better comparison might be jumbo conventional loans, which are nonconforming, versus conforming conventional loans. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership Conventional mortgages can be either conforming or nonconforming. A conforming mortgage meets the requirements set by the Federal Housing Finance Agency (FHFA) — the most common of these stipulates that the size of the loan be set at or below certain dollar limits. These limits vary from state to state, and even by counties within states. For 2025, the conforming loan limit is $806,500 in most areas, and up to $1,209,750 in higher-priced places. When a mortgage is conforming, it is eligible for Fannie Mae and Freddie Mac to buy on the secondary mortgage market. Knowing that these government-sponsored entities, major players in the mortgage industry, can purchase a mortgage greatly reduces a lender's risk in offering it. A jumbo loan is a conventional loan, but since it doesn't conform to the FHFA standards due to its size, it's considered nonconforming. If you're financing the purchase of a high-priced home, a jumbo loan can allow you to borrow the amount you need, even if that amount is higher than the conforming loan limit. Many mortgage lenders offer jumbo loans up to $3 million or $5 million. You might be able to find jumbo loans in even higher amounts, especially if you work with a mortgage broker who's a jumbo specialist. Key differences between jumbo and conforming loans While jumbo and conforming loans are both conventional loans, there are some significant differences to be aware of. Jumbo loans Conforming loans Minimum credit score 700 620 Minimum down payment 20-25% 3-5% Minimum DTI ratio 36-43% 43-50% Cash reserves Up to 12 months Up to 6 months Rates Higher due to elevated risk Could be lower, depending on your financial profile Qualifying for a jumbo loan While there are several qualifying factors that impact whether you can get a jumbo loan, the most important is your credit score. The minimum required is higher, for a start: 700 for a jumbo, as opposed to 620 for a conforming conventional loan. And while you can qualify with the minimum credit score, the best mortgage rates go to borrowers with scores of 740 or higher. You should also be prepared to make at least the minimum down payment — which, not surprisingly, is typically a larger percentage of the purchase price than for a conforming conventional loan. And you'll also need to meet the lender's debt-to-income (DTI) thresholds, which tend to be lower (that is, take up less of your monthly earnings). It's possible, eventually, to refinance a jumbo loan into a conventional conforming loan — provided the jumbo's remaining balance is at or below your area's conforming loan limit. Mortgage rates for a jumbo loan Many jumbo loan rates may actually be lower than those on some conforming loan offers, since lenders still want to remain competitive. Otherwise, jumbos tend to be influenced by the factors that move mortgage rates and interest rates in general, such as the benchmark federal funds rate the Federal Reserve sets. The particular interest rate you'll get, of course, depends on your personal financial circumstances. Most jumbo loans are conventional loans backed by private lenders. However, jumbo FHA and VA loans do exist — the maximum amount you can borrow may not be as big as that of conventional jumbos, though. Deciding which loan is right for you Jumbo and conventional conforming loans each have unique purposes, so it's important to choose the right one for your situation and financing needs. You might benefit from a jumbo loan if: You are purchasing a high-priced home You are purchasing in an area with a high cost of living You have a high income and an excellent credit score Your monthly debt load is low You can make a down payment of 20 percent or more A conforming loan may be a better option if: You are purchasing a moderate home, priced within the local loan limits You have a lower income Your credit score is just 'good' or 'fair' You have little savings or financial assets You have limited funds available for a down payment FAQs Are jumbo loans more difficult to qualify for? Yes — the lending criteria for jumbo loans are tighter than for conforming loans, mainly because the loan amounts are higher. In addition, they pose an elevated risk to lenders, because they can't be sold on the secondary mortgage market as easily. Is mortgage insurance required for jumbo loans? Not usually, because most lenders require a down payment of at least 20 percent to get a jumbo loan. Since that 20 percent threshold is met (or exceeded), private mortgage insurance is not required. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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