Split Closings New Target of Wire Fraud

November 30, 2021

Cyber criminals continue to adapt their schemes and are now targeting split closings.

Diverting seller proceeds and mortgage payoffs appear to be happening with more frequency in markets such as Michigan and Wisconsin where split closings are commonplace, according to Tom Cronkright, co-founder and CEO of CertifID.

He said that of the 10 recoveries CertifID recently assisted with, three involved split closings.

“Criminals are understanding the nuances of how we do business on a jurisdictional, market-to-market level,” Cronkright said.

By monitoring emails, criminals can quickly understand how a split closing works and take advantage of potential weaknesses in the communication and verification of wire instructions between title companies. ALTA’s Information Security Committee developed a checklist to verify outgoing wire information.

Title companies should not assume another agency has an equal policy for validating wire instructions. Cronkright said this assumption often leads to a “level of trust and blindness on the part of the disbursing title company” that can lead to disastrous results. Therefore, it is critical in all transactions to continue to follow your company’s wire fraud policy in order to validate and deliver non-compromised information, including wire instructions.

Title companies should independently verify and confirm all wires being sent, even when the instructions are provided by another title company.


Contact ALTA at 202-296-3671 or [email protected].