DS News - Bank of America

84 INDIANA Northsight Management Merges with ASONS Construction, Inc. Northsight Management LLC, a mortgage field services provider recently announced a business expansion—the finalization of its merger with ASONS Construction Inc., a highly regarded regional REO and property preservation service provider based in Muncie, Indiana. e procurement of ASONS marks the second and final M&A milestone for Northsight since August 2017. ASONS Construction Inc. is one of the oldest and most integrated industry firms of the region. It began when the founders purchased a foreclosed home and grasped first-hand the maintenance required. Over the years, ASONS expanded to provide field and property preser- vation services for U.S. government agencies, financial institutions, and private sector institu- tions. Northsight principals Josh Sarchet and Steve Johnson are committed to growing Northsight into the leading nationwide field service pro- vider. "We believe that the combination of the two organizations adds significant expertise and strength to Northsight," stated Sarchet. "e team at ASONS has a solid reputation within the REO preservation space which will further expand on Northsight's service offerings in addition to adding significant bench strength to the overall organization. With the onboard- ing of our new team from ASONS, we can continue our objective of becoming the premier service provider with an unfailing commitment to customer service, continuous improvement, and integrity." Northsight's headquarters will remain in Scottsdale, Arizona, and the company will expand by continuing core operation in Muncie, Indiana. MICHIGAN Identity Fraud in Mortgage: The Threat is Real . . . and Growing By omas W. Cronkright II, Esq. and Law- rence D. Duthler, Esq. Fraud is not a new topic for the mortgage industry. But our familiarity with it has, per- haps, dulled our vigilance when it comes to a massive new threat. Wire fraud—perhaps more accurately called identity fraud—has exploded recently, both in frequency and complexity. It is no understatement to say that we, as an industry, are woefully unprepared for it. Worst of all, many of us don't even acknowledge wire fraud as a top concern. If this describes you or your business, please consider the following a wake-up call to a trend that may already be an epidemic. Let's start with a few numbers: » $5.3 billion: the amount targeted by perpe- trators via business email compromise in 2016 (source: FBI) » 480 percent: the year-over-year increase in wire fraud scams reported by title com- panies to the Internet Crime Complaint Center (IC3) in 2016 » 2,370 percent: the increase in identified exposed losses to the most typical of wire fraud scams between January 2015 and December 2016 » 50: the number of states in which attempted wire fraud has been reported (source: IC3 and American Land Title Association) » 131: the number of countries in which attempted wire fraud has been reported (source: IC3 and ALTA) » 103: the number of nations to which fraudulent transfers have been rerouted (source: IC3 and ALTA) Now consider one more number. All of these jaw-dropping statistics refer to reported cases. And yet, we're learning that only 10 to 15 percent of fraud attempts are even reported. We're just looking at the tip of the iceberg. A scenario taking place near Denver puts faces and facts to the numbers. is is a typical example of the wire fraud we're seeing nation- wide right now. ere, a couple who thought they were buying their dream home ended up losing their life savings to fraud. e couple, intending to use the proceeds of the sale of their existing home as a down payment on their dream retirement home, learned instead that the money had vanished over the course of the purchase—and the new home was not theirs. ey lost $272,000. e couple came to believe that, over the course of the mortgage transaction, someone employed by their lender, real estate agent, or title agency sent sensitive financial information through nonsecure email. is infor- mation, they believe, allowed fraudsters to work themselves into the transaction using a disguised source of communication. In other words, when the time came for the lender to wire the closing funds, it went not to the proper party as intended, but to the disguised fraudster instead. Perhaps you're now convinced that wire fraud is a very real threat to the mortgage industry. But perhaps you think we just need to pay more attention to what we're doing to stamp it out. ink again. Fraudsters and their scams are proving to be adept at evolving to avoid our ef- forts to stop them. Let's start with the two most common kinds of wire fraud facing the industry today. e first is Business Email Compromise (BEC). is scam targets businesses working with suppliers and/or businesses that regularly perform wire transfer payments. e second fraud we're seeing grow is referred to as Email Account Compromise (EAC). is version of a BEC targets individuals who perform wire transfer payments. In all cases, the fraudster or fraudsters procure compromised data about identity in order to insert themselves in the communication chain as qualified parties to the transaction. In almost every case, the lender or another party unknowingly ends up wiring the closing funds directly to the imposter or his agent. We're see- ing perpetrators showing advanced understand- ing of the way the transaction and our industry works. Even local customs are observed. (We know of one case where the fraudster did not send emails before 9 a.m.—a custom for Real- tors and title agents in that market.) is is in combination with an industry that's behind in anti-fraud measures. It's also compounding the fact that the closing is almost always an incred- ibly chaotic situation to begin with. e closing is fertile with opportunities for fraud, and it appears that the bad guys have realized this. Perhaps this final example will demonstrate just how clever wire fraud perpetrators have become. We're learning now of a phone-porting scam in which a fraudster manages to use sensi- tive personal information to "port" (transfer or siphon) calls or emails intended for a proper party to the transaction to their own, disguised phone or e-mail. e use of the "ported" phone makes "call and verify" a waste of time once the fraudster is in the chain of communication. In such cases, the title agent or Realtor is basically calling the imposter and asking him or her to verify his identity! e first step to stopping any kind of fraud is acknowledging the depth and severity of the problem. Awareness and diligence can never hurt when it comes to risk mitigation. It's time for our industry to recognize the scale of wire fraud and the potential devastation it could bring about if we don't address it aggressively. omas W. Cronkright II, Esq. is the Co- founder and CEO of Sun Title and CertifID in Grand Rapids, Michigan. CertifID is a guaranteed

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