FundingShield, the fintech provider of plug-and-play solutions to manage risk, compliance and fraud prevention, has partnered with Tata Consultancy Services (TCS), a technology services and consulting company.
The partnership comes amid an increase in wire and title fraud risk. FundingShield and TCS aim to protect more lenders, homebuyers, sellers from wire and title fraud, both companies said.
“The safest way to verify information is through automated, real-time, source-data verification, which is FundingShield’s expertise. We look forward to bringing our automations to more of the top US banks, GSEs, and to numerous other sectors where TCS has deep domain knowledge and experience,” Ike Suri, CEO of FundingShield, said in a statement.
FundingShield’s API driven fitnech services allow lenders, investors, homebuyers and title companies to confirm wired funds are going to intended recipients and transactions are free of impact from cyber fraud, phishing, business email compromise, or title fraud.
The company uses source data in real-time to confirm that documents are valid, vendors are compliant with regulations and insurance coverage protecting lenders, real-estate investors and consumers is enforceable.
“Wire fraud prevention has become a mandatory capability as part of any mortgage solution, protecting lending institutions from multi-million dollar risks to the third-party closing, title, and settlement entities,” Santhosh Ananthakrishnan, global head of mortgage strategic initiatives at TCS, said in a statement.
Wire and title fraud risk were on the rise in Q2 compared to the same period in 2022, according to a report from FundingShield that did an analysis of a $68 billion portfolio of real estate closings.
The fraud prevention solutions company saw a 12.6% jump in the number of loans with issues, 6.5% rise in closing protection letter-related errors and a 4.7% increase in issues with proof of insurance in Q2.
Email phishing continued to be “one of the fastest and most effective ways that fraudsters scam parties in a real estate transaction,” the report said.
Business email compromise scams related to real estate were $446.1 million in 2022, marking a record for dollar losses, according to the Federal Bureau of Investigation (FBI).
A total of 2,284 complaints were received in 2022, the second most ever, after an all-time high of 2,593 in 2018.