FundingShield's report reveals significant issues in mortgage transactions, particularly concerning closing protection letter (CPL) validation errors and wire-related problems. In Q1 2025, approximately 10.8% of transactions had CPL-related data errors, and nearly half of all transactions showed discrepancies. Additionally, problems with license validation were noted in 1.7% of cases due to improper registrations. Rising scrutiny from regulatory bodies like Fannie Mae is pushing lenders to enhance compliance initiatives, including thorough audits of closing agents and title insurers to mitigate risks associated with data integrity and cybersecurity.
The persistently high levels of CPL validation errors, wire issues, and data mismatches highlight the urgent need for real-time source data verification and trusted data sets.
It's crucial that these checks are done for each transaction to mitigate risks effectively, emphasizing the responsibility lenders have in ensuring compliance and accuracy.
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