As if the threat of wire fraud wasn’t already high enough this year, several factors are aligning to worsen the situation. The fact that mortgage demand is at a record high, much of the country’s workforce is still working remotely and the Fourth of July falls on a Saturday this year have combined to form a perfect storm for wire fraud.
To put the gravity of the situation into perspective, Thomas Cronkright, cofounder and CEO of CertifID, says this could be the riskiest week for wire fraud in more than five years.
This perfect storm revolves around the fact that the fourth of July occurs on a Saturday, so the national holiday is being observed on Friday, July 3. That means the vast majority of people involved in the closing process — banks, title companies and law firms — are going to be out of the office.
The last time July 4 fell on a Saturday was in 2015. The observation of the holiday on Friday presents a problem because the Federal Reserve Bank remains open. According to the Board of Governors for the Federal Reserve’s website, “For holidays falling on Saturday, Federal Reserve Banks and Branches will be open the preceding Friday; however, the Board of Governors will be closed. For holidays falling on Sunday, all Federal Reserve offices will be closed the following Monday.”
This results in three critical situations that when combined, turn into the one of the riskiest times for wire fraud:
- Borrowers and sellers are able to close on their home and wire money
- Key stakeholders in the real estate closing process are off work
- The Federal Reserve is open to move funds