How PayoffProtect is Leveling Up the Industry

We're continuing to take on mortgage payoff fraud with PayoffProtect — and learning a lot about what our industry still needs in the process.

How PayoffProtect is Leveling Up the Industry

We're continuing to take on mortgage payoff fraud with PayoffProtect — and learning a lot about what our industry still needs in the process.

A hand looking over a contract holding a phone.How PayoffProtect is Leveling Up the Industry
Written by:

William Finn

Read time:

5

Category:

Mortgage Payoff

Date:

Dec 4, 2023

Earlier this year, I reflected on a year of PayoffProtect, our mortgage payoff fraud protection solution. At that point, we secured over $37B in payoffs, and one thing was certain: our industry needed it more than ever.

As we wrap up 2023, I am proud to say we’re continuing to protect more and more mortgage payoffs. And, as many of our customers are reporting, “It’s helping us sleep better at night.” (And who wouldn't like a few extra hours of sleep?)

If you’ve been following headlines, you’ve seen how wire fraud is hammering the industry. Fraudsters are becoming more sophisticated with lenders and real estate transactions in their crosshairs. I’ve noticed a sense of urgency among many lenders and agents to rethink their processes; it reminded me of my earliest conversations with customers who sought a better way to secure their payoffs before we built PayoffProtect. 

Mortgage payoff fraud is still a significant threat. Until fraudsters stop operating entirely (one can dream) or we can protect every transaction (you know where to find us), it’ll continue to be challenging. However, whether you use PayoffProtect or not, there are operational changes you should consider to help stop mortgage payoff fraud on your side of the business.

Free yourself from outdated procedures

Callbacks and spreadsheets are still a source of pain. They absorb all your time. They’re messy. And, unfortunately, they’re not even all that accurate

As we looked into the problem of mortgage payoff fraud over a year ago, we discovered industry-wide operational inefficiencies. Many lenders still rely on old processes, which we should address as an industry in 2024.

Rethink the spreadsheets

Professionals often rely on lengthy and confusing callback procedures, including many phone numbers and spreadsheets. This increases the risk of human error and fraud. It might be time to look into a more modern system if you still use outdated and unsecured processes like these.

Standardize your procedures

Wiring instructions are rarely straightforward. A “loan number” for one bank could be an “account number” for others. Some have standalone payoff accounts, while others use unique account numbers for every payoff. An independent solution can help you streamline the differences.

Acknowledge industry instability

Frequent mergers, acquisitions, and process changes in the industry create a breeding ground for fraudulent activities. Do you have a plan to stay ahead of the shifts? Fighting fraud might feel like starting from the ground up, but it’s worth it. 

Start with a “safety-first” mindset

Wire fraud doesn’t often become a top-of-mind issue until after someone has been scammed. It sounds cliche, but operating with a strong sense of awareness — or put more simply, a “safety-first mindset” — is crucial.

Don’t wait until it’s too late

Unfortunately, many current PayoffProtect customers sign up with us after first seeking our Fraud Recovery Services. I can’t tell you how many calls I’ve had that ended with, “I wish I did this sooner.” As you plan for 2024, make sure you plan for fraud prevention.

Assume every payoff is at risk

Until you know for sure, you should assume that the payoff you’re working on is under the gaze of a fraudster. Fraudsters are getting smarter, using new tactics to hide inside of inboxes. Make sure to check your auto-forwarding rules regularly. 

Trust, but verify

Wiring payoffs can be scary. It’s thousands of dollars, transferred instantly; you can never be too careful. We’ve heard from several lender representatives during callbacks that “whatever PDF you received is right.” But what if it wasn’t? Take the time to ensure everything is correct, or better yet, let us do it for you.

Let technology be your extra set of eyes

It can be daunting to incorporate new technology into your operations. You may have decades-long processes in place at your company. Bringing in a new tool might initially feel disruptive. But more often than not — and especially with PayoffProtect — it’s a simple onboarding process. And the benefits could be priceless.

In fact, through our PayoffProtect solution, we’ve estimated that we’ve saved over 38,000 hours in total customer time savings from lender callbacks. Imagine getting that time back.

If fraudsters are embracing technology, shouldn’t you?

With the rise in AI, fraudsters are getting even better at making their fraudulent documents look legitimate. 

In a recent CertifID webinar, Stephen Dougherty, an Investigator with the United States Secret Service, noted how easily a fraudster can write a grammatically perfect email or manipulate a PDF to appear legitimate. 

Gone are the days of misspellings and noticeably fraudulent documents. It’s getting easier to trick you with technology — should you be able to spot it just as efficiently?

Tech lets you verify in minutes

It takes our customers around two minutes to fill out a payoff form. Then, it’s just another second to get back an instant result. And we can confirm the details within three hours for those payoffs that are not instantly verified. The path to happy homeowners is simplifying with technology.

Technology is impartial

PayoffProtect is a neutral third-party solution. During a transaction, you might get one payoff statement for a loan, and then on the day before closing, you’ll get another one. How do you know what’s correct? How can you verify across lenders? Callbacks aren’t reliable, and tracking the correct details can be incredibly difficult. Technology, like PayoffProtect, helps you do all that work simultaneously.

As the industry moves toward more integrated processes, embrace technology and let it become a great partner to your expertise.

What’s next for PayoffProtect

My experience with PayoffProtect at CertifID has had us tackling complex challenges in the mortgage payoff space. We're committed to making real estate transactions safer, which includes backing each transaction with $1 million in direct, first-party insurance coverage. So even if there’s an issue, you’re covered.

But we’re not stopping there. We’re continuing to find ways to speed up the validation process so you can work as efficiently and securely as possible. Mortgage payoff fraud has no place in real estate, and we’ll continue to evolve our solutions with the industry so you’re always protected.

For more on mortgage payoff fraud:

William Finn

Customer Success Team Lead

Will began his career as an analyst in the mortgage industry after graduating from Santa Clara University. Since then, he has applied his skills wearing many different hats for multiple startups. In his free time, you can most likely find him out fly fishing on any number of rivers.

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