"FundingShield's analysis saw record high levels of closing protection letter validation errors, which impacted 10.5% of transactions. These errors often involved discrepancies in borrower names, property details and title holder information, all of which contributed to a 12.7% quarter-over-quarter increase. This trend likely reflects heightened scrutiny following recent regulatory guidance and the emergence of more sophisticated fraud schemes exploiting gaps between lender and title systems, Suri explained."
"Wire-related errors appeared in 9.1% of transactions, which marked the eighth consecutive quarter above 8%. License-related issues jumped 23.1% from Q2 2025, with many title and closing agents operating under expired or improperly maintained licenses. The dramatic 23.11% spike in license-related problems is among the most concerning trends this quarter, signaling widespread compliance failures among closing agents and title companies, Suri said. Many are operating with expired or improperly maintained licenses, increasing liability exposure for lenders and likely triggering more enforcement actions by state regulators."
"During Q3 2025, a massive data breach affecting Google and Salesforce exposed an estimated 2.5 billion records across 760 organizations, including major technology and financial firms. Suri noted that breaches of that scale damage digital trust and complicate identity verification."
Closing protection letter validation errors impacted 10.5% of transactions, driven by discrepancies in borrower names, property details and title holder information, contributing to a 12.7% quarter-over-quarter increase. Wire-related errors appeared in 9.1% of transactions, marking the eighth consecutive quarter above 8%. License-related issues rose 23.1% from Q2 2025, with many title and closing agents operating under expired or improperly maintained licenses; a 23.11% spike signals widespread compliance failures and increased lender liability. Fannie Mae's Mortgage Origination Risk Assessment audits target seller diligence around title and escrow providers. A massive Q3 2025 breach exposed an estimated 2.5 billion records, undermining identity verification and elevating fraud and cybersecurity risks, prompting heightened regulatory scrutiny in Q4 2025.
#closing-protection-letter-errors #license-compliance #wire-transfer-errors #fraud-and-cybersecurity
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