Fraud permeates every corner of the real estate industry. As the industry grows in complexity, so do the deceptive practices that accompany it. This makes fraud increasingly difficult to detect and prevent. Understanding the current trends and impacts of fraud can help industry professionals better protect themselves and those they serve.

The State of Real Estate Fraud in the U.S.

Fraud is becoming more frequent and costly across the real estate industry. According to Cotality, the National Mortgage Application Fraud Risk Index increased 6.1% year over year in 2025. The American Land Title Association reported that 28% of title insurance companies experienced at least one seller impersonation fraud attempt in 2023. While the FBI¹ reports a slight decrease in fraud victims in 2023 to 2024 (from 9,521 to 9,359), the real concern lies in the $28 million increase in financial losses in just one year. With the changing landscape, real estate professionals should consider treating fraud prevention education as a proactive measure instead of an afterthought.

The Role of Technology

Technological advances are playing a role in the evolution of real estate fraud. According to a report by ClosingLock, cybercriminals may use techniques to impersonate real estate professionals like voice cloning, synthetic identity fraud, generative AI phishing, and data scraping. It’s important to remember that technological advancements can help more than just the scammers. Methods of protection like advanced identity verification tools, can help add an extra layer of security and confidence in each transaction.

A Highly Susceptible Industry

The industry may face heightened vulnerability as scammers try to exploit gaps within and between organizations. Public records such as MLS data, tax records, and even LinkedIn profiles can help provide the data needed for scammers to craft convincing business impersonations. ClosingLock also reports that the real estate industry is particularly susceptible to these attacks due to its unique characteristics: high-value transactions combined with time pressure and emotionally invested buyers. This helps create ideal conditions for deception.

Despite investments in security infrastructure, the interconnected nature of real estate transactions could mean that the industry is only as strong as its weakest vendor relationship. The good news is that with education, vigilance, and strong vendor partners, real estate professionals can help mitigate risks to their company and clients.

How to Help Mitigate the Risk of Common Fraud Schemes

Understanding common fraud tactics can help real estate professionals protect their company and clients.

Wire Fraud: Redirects funds into fraudulent accounts by intercepting legitimate wire instructions and recirculating altered versions via compromised emails, spoofed addresses, or AI-generated voice messages impersonating trusted professionals.

• According to a report by Certifid, 52% of consumers are either not aware or only somewhat aware of the risks of wire fraud.
• Educate customers with written guidance on secure wire processes and reinforce the importance of verifying instructions. Consider adopting verification protocols.

Title Fraud: Involves the illegal transfer of the title or deed through fraudulent documentation such as forged signatures or fake identification to transfer property ownership.

• A study commissioned by the American Land Title Association found that fraud and forgery claims are more than 5x higher than other title claims.
• Title insurance can help protect lenders and property owners from title defects resulting from past fraud and forgery events. Not all policies are the same, be sure to understand what the policy does and does not cover.

Mortgage Fraud: Includes the misrepresentation of income, employment, debt, or intended occupancy during the application process, exposing lenders and investors to potential financial losses.

• Cotality found that the largest year-over-year increase for mortgage fraud was a 12% increase in undisclosed debt.
• Clear, consistent and diligent underwriting and application verification practices may help reduce this fraud risk.

This is not an exhaustive list; however, it can be used as a starting point for further education and research.

Red Flags You Shouldn’t Miss

Recognizing and sharing the early warning signs with clients can help you intervene before damage occurs. Consider warning customers of urgent fund transfer requests, last-minute wiring changes, high-pressure tactics, and parties avoiding in-person meetings or exclusively communicating digitally.

Documentation irregularities are equally important red flags that can signal both mortgage and title fraud. For mortgage fraud, income or asset information that does not match employment history, verification letters with grammatical errors, missing documentation despite repeated requests, address discrepancies, and unexplained third parties may all be signs of potential fraud. For title-related documentation concerns, altered property deeds, inconsistent signatures, sellers who won’t provide proper identification or seem unfamiliar with basic property details, and quitclaim deeds being used where warranty deeds would typically be standard may signal potential fraud.

Sharing warning signs with clients and holding regular team trainings can help reinforce best practices when protecting against bad actors. Keep in mind that these are not exhaustive lists of potential red flags, and they don't necessarily confirm fraudulent activity. Staying vigilant for any irregularities is key to fraud prevention but always verify through proper due diligence. To continue expanding your knowledge, Radian offers two mortgage fraud-focused training courses.

Radian’s Role in Protection

Working with trustworthy providers can be crucial to help defend you and customers. With almost 50 years of industry experience, the Radian Title Services and its subsidiaries are prepared to continue helping the industry protect itself and customers through several specialized products and services:

• Title insurance through Radian Title Insurance Inc. can be a powerful defense for lenders and customers against the consequences of fraudulent activities, offering coverage for losses stemming from past forged deeds or other title defects. Your customers might also have the option of purchasing post-policy forgery protection through an enhanced Homeowners Policy of Title Insurance².
• Settlement services through Radian Settlement Services Inc. may also play a key protective role through verification processes that help detect inconsistencies or red flags.

Our services work together with your infrastructure to help you identify potential red flags that might indicate fraudulent activity in today’s complex risk environment.

Building a Stronger Defense Together

Recognizing the breadth and rapidly evolving nature of real estate fraud leads the industry to a position to better defend against these schemes. Their impacts do not only touch the customer, they cascade through the entire industry. Fraud can have impactful consequences that leave brokers, lenders, and title companies, among others, with damaged reputations or significant financial losses. In an environment where volume is low and margins may be squeezed, the industry can’t afford these losses. Combating real estate fraud is not the responsibility of any single entity but requires vigilance from every professional involved in a transaction. Staying informed, implementing robust verification processes, and working with experienced professionals isn't just good business, it's essential for protecting the integrity of every transaction.

 

¹The FBI’s figures encompass losses from real estate investments, rental and timeshare property fraud, and related internet crimes.

²Coverage only available for one-to-four family residence and only if each insured named in Schedule A is a Natural Person; other terms and restrictions apply. Contact a representative for more information.

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