How to Pick a Mortgage Payoff Protection Solution for Your Business

Business is booming for scammers engaged in mortgage payoff fraud. From the first quarter to the second quarter of 2023 alone, CertifID recovery specialists saw a fivefold increase in mortgage payoff fraud. CertifID secured $1.9 million from attempted fraud in Q1. By Q2, that number rose 532% to $12 million. These aren’t just numbers; they represent the wealth and aspirations of small business owners and hopeful homeowners who aren’t equipped to face powerful cyber crime rings alone.

Fortunately, the title companies, banks, buyers, and sellers participating in these transactions could count on full-scale protection-–including prevention and recovery—from their mortgage payoff protection partner. Their solution delivered on the promise to detect, disrupt, and secure their wealth.

Unfortunately, not all mortgage payoff protection solutions are equally rigorous or effective. Providers can capitalize on the urgent demand for coverage and promise peace of mind without delivering robust payoff protection feature sets. Use the following criteria to understand the risks, evaluate the options, and select a mortgage payoff protection solution that covers all contingencies for your business.

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What is Mortgage Payoff Fraud?

Mortgage payoff fraud happens when a cyber criminal impersonates a mortgage lender in a purchase or refinance transaction to divert the payment to their own bank account. Tactics vary, but mortgage scammers often take the following steps:

• Sending phishing emails to real estate professionals such as title companies, real estate agents, or even buyers and sellers to gain unauthorized access to their email accounts;
• Collecting information about active and upcoming real estate transactions, including the mortgage payoff details such as account numbers, banking institutions, payoff amounts, parties to the transaction, and key dates;
• Intercepting the genuine mortgage payoff statement and changing the bank account details for the purpose of directing the payment to a criminal’s bank account;
• Impersonating the mortgage company and sending the fraudulent payoff statement to the title or escrow company;
• And receiving and redirecting the payoff funds intended for the lender or seller to alternative bank accounts to reduce the chance of recovery.

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1. Evaluate security features and reliability

Mortgage payoff protection must include a range of features to match the diverse tactics scammers use. At a basic level, all protection tools aim to verify identities and banking credentials for the parties involved in a mortgage transaction, but some options include critical layers of additional security, usability, and support.

What is the success rate? 

When comparing mortgage payoff protection solutions, start by checking validation success rates. Select a solution with a high percentage of instant validations. When juggling details and documentation in preparation for a high-stakes transaction, you’ll appreciate rapid confirmation of banking details and stakeholder identities. Complex transactions may require more time to authenticate, but those should be the exceptions, not the rule.

Does it provide definitive answers?

Pair speed with reliability and utility by choosing a solution that offers definitive answers about transaction safety. When submitting data for authentication, you may see results in a range of formats. The optimal payoff protection solution will clearly confirm that a wire transfer is safe to send. Others will only return a confidence score, forcing the user to bet on the safety of each wire transfer. Choose a provider that fully absorbs the risks for authorizing transactions.

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2. Gauge User Experience and Automation

No product can instantly validate the safety of every mortgage payoff, and they shouldn’t. If a fraudster has concealed their criminal intentions behind layers of misinformation, or used sophisticated deepfakes, thorough authentication can and should take more time. 

In these cases, you’ll want a mortgage payoff protection solution to facilitate user-friendly manual validation. Assess whether the payoff protection product facilitates swift and easy manual validation without additional costs.

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3. Review Built-In Insurance and Recovery Support Services

When powerful cybercriminals bypass payoff protection solutions, your insurance should kick in, but you shouldn’t have to shop for payoff protection and cyber insurance. 

Choose a solution with direct, first-party coverage

High-quality mortgage payoff protection solutions — like CertifID — include insurance and guarantees for all your funds. Make informed decisions based on the type of policy and extent of coverage, whether it is part of a broader tech E&O, Cyber, or Cybercrime policy or a stand-alone, first-party policy that exclusively covers the risks of product usage.

Navigating the claims process can still be intimidating, but not when you have a dedicated recovery specialist by your side advocating for your case. This is just one of the benefits included in the package from best-in-class mortgage payoff protection providers.

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4. Review Exceptions and Limitations to Protection

Read the fine print. Look for representations and warranties that limit your protection in the event that fraudulent banking details are involved. Some mortgage payoff protection providers will not take responsibility for validating counterfeit credentials if they were obtained by certain fraudulent means. 

Without meaning to, transaction participants may introduce fraudulent data, but that’s when they’ll need their payoff protection partner the most. Too often, victims in these scenarios encounter blame, stigma, and inflexible policies, rather than partnership and problem-solving. Choose a payoff solution that offers the most protection, regardless of the data source or integrity.

Once you’ve evaluated a payoff protection provider against all the criteria, adopt the solution that checks all the boxes—combining technical acumen, ease of use, and accessible support—and let the provider focus on fraud so you can focus on your business.

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Learn more about how to detect and prevent mortgage payoff fraud from cyber security specialists.

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