About 46.6% of residential, commercial and business-purpose loans analyzed by FundingShield during the second quarter were flagged for issues that posed a “significant risk of wire and title fraud,” according to a report released Monday by the California-based provider of mortgage and title fraud prevention services.
While that may sound like a lot, it’s a slight decline from the approximately 46.8% of flagged loan transactions reported during the first quarter of 2025, and about a 5.2% dip from the recent high of 51.8% seen during the fourth quarter of 2023.
Still, the FundingShield report noted that each problematic loan analyzed last quarter had an average of 2.2 issues, which the company claims highlights a “troubling trend” of existing controls by closing agents and lenders “proving insufficient to consistently detect and resolve these vulnerabilities before closing.”
The report noted that wire instruction issues increased about 2% quarter over quarter, while licensing-related issues rose 5.1%. Reasons cited by FundingShield for elevated licensing issues included “entities having lapsed, terminated or suspended licenses and inconsistent data when verified with registrars, insurance regulators and licensing bodies.”
Fraud detection is an area of increased regulatory focus. In May, mortgage giant Fannie Mae launched an artificial intelligence-driven tech platform from software company Palantir Technologies that’s designed to automate fraud detection. While the rollout was limited to multifamily loans, Fannie Mae President and CEO Priscilla Almodovar said the company may expand it to single-family mortgages in the future.
