The below article has been pulled from CFO TECH OUTLOOKS article featuring Ike Suri, Chairman & CEO of FundingShield. Original article is available here
“A perfect storm.” That’s how Ike Suri describes wire-fraud and risks prevailing in the mortgage industry today. For the serial entrepreneur, who has also served as a CEO, chairman, board member, investor and advisor to private and public companies, the turbulent environment reflects chaos stirred by the ever-changing regulations in the mortgage lending landscape and the advances in the technology being exploited by bad actors to commit wire fraud. “Fraud has become epidemic. In the residential & commercial mortgage industry, when a buyer applies for a mortgage, both the lenders and the buyers are equally at risk of fraud. Lenders have to look into a number of factors—non-compliance, verification and validation of multiple documents of all the parties involved, evaluation of settlement risk, and more. From lender and borrower to escrow, title and attorney, a typical transaction involves six to seven parties in the entire process, wherein the information exchanged between parties and the integrity of the transaction are vulnerable to breach and wire fraud,” informs Suri. He explains that with an increase in fraudulent activities including social engineering, phishing, hacks and other fraud schemes deployed in the market, the large amounts of loan proceeds (in the form of wired money) sent to escrow companies with no insurance coverage and the down payment with the home-buyers are susceptible to risk.
It was this predicament along with the yearning to become an agent of change in the industry that led to the inception of FundingShield—a fintech company providing risk management, fraud prevention and regulatory compliance technology solutions for protecting the mortgage, real estate, title and legal industries. “We are a unique and one-of-its-kind company in the country that provides real-time data to prevent wire fraud and manage risk and compliance in the mortgage closing/settlement process,” says Suri, Chairman and CEO of FundingShield. He draws on his 25 years of rich experience in private equity, technology, and human capital management arenas to lead FundingShield to enable seamless and secure execution of the closing process and transfer of funds at the end of a mortgage loan transaction. “The mortgage closing/settlement process is the most painful part of the whole journey; this is where we come in. We create a more secure closing experience for all parties involved in a loan, from the borrower to the investor and all the service providers in-between.”
FundingShield’s technology-enabled services verify and validate the documents and the parties at the transaction level of loan settlements allowing the firm to facilitate cost-efficient and highly accurate services. The company has developed a machine learning and artificial intelligence-powered, plug-and-play, cloud-based, malleable, scalable, and cost-effective solution that caters to the needs of both the lenders and the buyers to prevent fraud. FundingShield provides lenders and investors real-time transaction-level verification, certified wire fraud protection, protect loss of funds at closing due to cyber-based and other threats, and improve their bottom line. “Before FundingShield came into the picture, companies had been dealing with data that was static and analyzed it, once a year for verifying the people in the process. However, this method became cumbersome when parties from different states were involved, owing to the local regulations and laws to abide by. That said, we have eliminated the vulnerabilities that the mortgage closing process is exposed to through real-time processing data and representations of the parties involved. We make the transaction airtight,” Suri adds. The solution operates like a trading exchange, where at the time of closing, rapid processing is carried out electronically through the company’s highly-efficient and time-saving algorithms and software solutions, while also ensuring that the right information reaches the right person. That’s not all; FundingShield goes a step further to provide clients with up to $2-$5 million per transaction coverage to support and protect the transaction.
From a consumer’s perspective, FundingShield has also developed a product for the B2B2C market, working in close collaboration with the lenders to collect consumer data and provide them with the option to pay before the consumer utilizes the funding, thus preventing wire fraud and other issues. The company is currently collaborating with renowned names in the industry to develop a B2C product—slated for launch by the end of this year—that will cater to the sellers’ needs.
FundingShield has successfully prevented wire fraud impact and losses to its clients on over $500 billion of mortgage closings. “Often, 20 percent of the connections that we process on behalf of our clients are non-compliant. We empower them with the information required to rapidly drive decision-making pertaining to risks and, in turn, bring that 20 percent down to 0.5 percent,” extols Suri. Needless to say, the premier and prime money center banks, wholesale correspondent and retail lenders, warehouse banks, insurance companies, title companies and law firms rely on FundingShield’s industry-leading wire fraud protection to make lending more secure and transparent. Recently, FundingShield received MISMO Software Certification for Wire Fraud Prevention Technology, making it the only wire fraud prevention fintech with that certification. “We worked closely with MISMO—an organization that operates under the Mortgage Bankers Association—to help them write the workflows for data integrity and wire fraud prevention,” he adds.
FundingShield’s comprehensive wire fraud and settlement risk management technology is made available through Encompass ® by Ellie Mae ®. The seamless integration allows lenders to order FundingShield’s services directly through the Encompass digital mortgage solution to drive quality and efficiency in the loan origination, closing and title agent vetting processes via this loan-level certification product. Suri states, “Our seamless integration with Encompass enables our clients to access FundingShield’s user-centric workflows from their native LOS, so they can more efficiently process mortgage loans, protect their firm from fraud and grow their business.”
With a strong value proposition in place, FundingShield is all set to capture the lion’s share in the market. Moving ahead, the company aims to constantly innovate and improve the delivery of its solutions for ensuring better customer experience.