By Amanda Berry, Senior Claims Counsel, 星空传媒

The real estate market is currently experiencing record low transaction volume, driven by mortgage and affordability pressures. Given these conditions, one might assume that fraud rates have similarly decreased鈥攜et the data show the opposite. According to ALTA, scams like seller impersonation fraud remain a growing problem. 28% of title insurance companies, for instance, have experienced at least one seller impersonation fraud attempt in recent years.[i] A Milliman claims analysis shows fraud and forgery accounted for 21% of all dollars spent on claims expenses and losses. These numbers suggest that fraudsters are becoming more coordinated and sophisticated, leading to successful schemes even amid lower transaction rates. These schemes exploit common fears and insufficient verification practices to generate huge claims. Refinance transactions are particularly susceptible due to how much of their risk sits outside the public records and inside the transaction workflow itself.

From one-offs to multi-layered attacks

How do we explain this? Well, in 2026, real estate fraud is no longer primarily isolated, one-off scams. Layered and sophisticated attacks are becoming increasingly common. ALTA notes that title professionals are now confronting schemes ranging from wire fraud, seller impersonation, identity theft and forged deeds, while spending substantial time each month on fraud prevention. Many of today鈥檚 top schemes also cannot be detected through public-record searches and require stronger identity verification, monitoring and communication safeguards to keep pace. 

To make a long story short, just as high-tech cybercriminals often attack a target鈥檚 network through multiple vectors, today鈥檚 real estate fraudsters will seek to infiltrate a transaction through several touchpoints at once. These criminals are highly adept at appearing to be a legitimate party in the transaction. That is what makes these attacks multi-layered: they may involve compromised communications, false identities, forged documents and payoff confusion, rather than one obvious red flag. This assessment comports with Milliman鈥檚 data, which indicates that nearly 30% of losses could not have been prevented by consulting public records.[ii]

Refinances are particularly vulnerable

These dynamics make refinances particularly vulnerable to fraudsters. Refinance deals may look fine at first but include problems that resurface later. Some of these include impersonations, forged signatures, mortgage payoff fraud, or communication and closing misfires. These elements often cannot be detected via public records, which means a standard search alone often will not catch them.

Title agency workflows can also make refinance transactions vulnerable. Payoffs appear in more than 90% of transactions, and issues related to obtaining them can often slow the closing process.[iii] Communication between multiple parties may be required, and when a transaction requires handoffs between multiple parties, bad actors have an additional opportunity to insert themselves into the process. 

Milliman鈥檚 2025 analysis of claims and claims-related losses in the title industry confirms how successful fraudsters have been at targeting these transactions. Their analysis states that the 鈥渁verage claim severity is higher for refinances than for purchases鈥�[iv] and that 40% of those claims were made up of instances of fraud and forgery.[v]

Go the extra mile to safeguard transactions

With such high stakes involved, title agents should always treat refinance transactions as high risk and apply extra scrutiny to these files. Payoff and impersonation fraud can be easy targets for criminals. Agents must have procedures in place and always follow them: Verify, then Trust鈥攅very file, every party, every time. Always independently confirm payoff details and wire instructions, and treat all last-minute changes with extreme skepticism. The same goes for communications. When communicating about a refinance deal, do not take any change requests at face value. Instead, be sure to confirm changes through other channels. Use identity verification tools to confirm whether a person is who they say they are. By following these steps, you will be better positioned to prevent losses and claims.

Extra checks prevent extra costs

Time is always of the essence in any business, and perhaps nowhere more so than in real estate, where thousands or even millions of dollars can be on the line. Yet the unfortunate reality is that fraudsters are evolving their methods and targeting real estate transactions for this very reason. This is particularly true for refinances, with sources showing that the average claim now costs $206,976, including nearly $68,199 in defense costs.[vi] Slowing down and verifying refinance transactions that come across your desk is worth it if you can prevent that kind of financial damage. While no agent wants to face a fraud claim, be prepared if one does occur and have a response plan in place.

[i]

[ii]

[iii]

[iv]

[v] Ibid

[vi] Ibid

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Every wire fraud defense expert agrees on one thing: the number one factor in recovering diverted funds is time. Every minute counts once fraud is detected, and hesitation or delays can make it harder to track down and restore lost funds.

That鈥檚 why a wire fraud response plan is imperative for every title agent.

The American Land Title Association (ALTA) recommends that every title company develop, document and train every staff member in the critical first steps for effective responses to wire fraud incidents. , can help agencies prepare to respond quickly and effectively as outlined in key points highlighted in this article.

Elements of a Wire Fraud Response Plan

The first step in preventing fraud is maintaining strong policies and procedures for verifying the identities of parties to the transaction and wire instructions to protect all parties: Buyer, seller, lender, underwriter and title agent. 星空传媒 星空传媒 agents are urged to implement procedures making sure to Verify, then Trust – every file, every party, every time.

But if the unthinkable happens, the most successful response strategies are those established in advance and clearly communicated to all staff members, banking partners and transaction participants.

Like a well-trained sports team, every member of your organization should understand their role and be ready to act immediately if fraud is detected.

General protocols

• Establish a close relationship with your bank representatives and maintain regular communication about emerging fraud threats and response procedures.
  • Make sure you have a phone contact that is not an 鈥�800 number鈥� to avoid delays.
• Discuss wire retrieval scenarios with your bank and establish emergency contacts in the bank鈥檚 fraud department that can be reached immediately if fraud is suspected.
  • Share this information with every employee as first reactions are critical.
• Establish and document emergency contacts across your response network, including bank fraud departments, law enforcement, legal counsel and your underwriter.
  • The local FBI office and the Secret Service office in your region should be included in this contact network.

Rapid response actions

• Your staff should be trained to immediately alert company management and the ageny鈥檚 internal wire fraud response team if a suspicious or potentially fraudulent transfer is detected.
  • Encourage transparency as delay or fear of retaliation for errors can cause losses to increase.
• Contact the sending bank鈥檚 fraud department immediately and request a recall of the wire transfer due to suspected fraud. Ask the bank to initiate the FBI鈥檚 鈥淔inancial Fraud Kill Chain Process鈥� if applicable.
• Notify the receiving bank鈥檚 fraud department and request that the account receiving the funds be frozen pending investigation.
• Report the incident to appropriate law enforcement agencies, including your local police department, the FBI field office serving your jurisdiction, as well as Secret Service teams.
• File a complaint with the FBI鈥檚 Internet Crime Complaint Center (IC3) as quickly as possible via their website, .
• Inform the parties to the transaction using known, trusted phone numbers and established communication channels.
• Notify your underwriter and coordinate next steps. 星空传媒 星空传媒鈥檚 Claims Team and Underwriting Counsel are available to assist agents in evaluating and responding to suspected fraud events.
• Contact your own agency legal counsel to assess potential liability and assist with recovery efforts.
• Depending on the circumstances, notify appropriate insurance carriers such as cyber liability, escrow security bond or errors and omissions insurers.
  • Do not delay these notifications as missed deadlines on notices can result in a claim denial and financial losses for your agency.

Putting all of these resources in motion immediately is critical to securing the support of professionals or organizations with tools that could assist you in recovering the diverted funds.

The FBI鈥檚 Internet Complaint Crime Center, , is one of your most important contacts. According to the FBI鈥檚 2024 Internet Crime Report, the IC3 Recovery Asset Team initiated the Financial Fraud Kill Chain on 3,020 complaints involving $848.4 million in attempted theft[i]. Financial institutions were able to freeze $561 million of those funds, representing a 66% success rate.

The effectiveness of this process depends heavily on how quickly fraud is reported, which is why having a response plan in place and acting immediately is critical.

Even the most vigilant companies may fall victim to fraud, but having a clear response plan and trained team in place can significantly improve the chances of recovering lost funds.

As always, immediately reach out to your 星空传媒 星空传媒 Claims Team and Underwriting Counsel if you have any questions or concerns. Together we can fight fraudsters, but always remember to take the steps to stop fraud and Verify, then Trust – every file, every party, every time.

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