Wire fraud prevention firm CertifID and big four title firm Old Republic have entered into a strategic agreement to prevent mortgage payoff fraud, according to an announcement on Thursday.
Mortgage payoff fraud occurs when a title company mistakenly sends payoff funds to a fraudulent bank account after receiving wire instructions that appear to be from the mortgage servicer. The instructions, however, are actually from fraudsters.
“Old Republic Title continues to focus on innovation to enable the success of our direct and agency operations,” Carolyn Monroe, the president and CEO of Old Republic National Title Holding Co., said in a statement. “We are excited to leverage the comprehensive approach to fraud prevention that CertifID provides, inclusive of software, insurance, and recovery and support services, to help prevent fraud and create the best experiences for our agents and customers, and all parties involved in real estate transactions.”
Although fewer home sale transactions closed in 2023, fraudsters continued to be active, with the FBI reporting that fraud loss in the real estate sector reached $446 million in 2023.
Data from CertifID shows that mortgage payoff fraud has become the largest source of losses among title firms, with the median loss coming in at $257,000 in 2023. Additionally, a study by the American Land Title Association found that roughly 17% of title companies have sent money to an incorrect account due to fraud, and 49% of those organizations have done so more than once.
In a statement, CertifID CEO Tyler Adams said that he applauds Old Republic for taking the initiative to help reduce the risk of mortgage payoff fraud.
“We look forward to working together to truly solve the issue of payoff fraud seen across the industry,” Adams added.
In 2023, Old Republic’s title segment reported net fee and premium earnings of $2.563 billion, down 33.2% compared to 2022, and a pretax income of $133.5 million, a drop of 56.7%.
