Hello LOs!
After a major title industry cloud services provider experienced a ransomware attack earlier this year, I've been giving thought to how pervasive cyberattacks are in the housing finance ecosystem.
Perhaps the ones that become public are just a fraction of the real number of attacks. And what about close calls?
It turns out that the Federal Bureau of Investigation thinks real estate transactions are particularly vulnerable to cyberattacks, and the sector has been increasingly targeted by sophisticated business email compromise scams in recent years. Cyberattacks cost the real estate and rental sectors at least $213 million last year, the FBI notes in its latest Internet Crime Report.
Ed Hensley, who leads the mortgage division of WesBanco, recalled during a recent video panel a harrowing attack that targeted loan officers and wealth managers at the West Virginia-headquartered bank.
"We were getting hit from four continents," Hensley said. "It was a sophisticated, coordinated effort."
But attackers are not just after the account information of well-heeled depository clients.
"We're a depository, but if you're an IMB and you have a servicing portfolio, getting that customer information could be just as valuable," Hensley said.
When a cyberattack occurs, an organization typically shuts down all of their systems to isolate the breach and determine how much it will cost to get them back up and running. These costs can be steep, but paying up is often the best alternative.
"The fees in an attack are massive," said James Brody, who chairs the mortgage banking practice at law firm Johnston Thomas. "You have to make a determination of whether or not you want to pay these people, because it may cost you a lot more money in downtime if you don't do that."
Remote working complicates information security practices. Whether or not your hard drive is encrypted, how often you change your password, or whether you leave your laptop on over the weekend, could provide an entry point for an attacker.
The frequency of attacks is rising sharply, Brody said. He handled more cyberattacks with mortgage clients last year than he has in the past five years combined.
Robert Moore, president of Inventiv Technologies, had a "front row seat" when an IMB was hit by ransomware. They ended up paying the fee, after shutting down business for a time.
"In the mid-term, you're not closing loans," Moore said.
"You have people still originating loans, or trying to, theoretically. You have no way of selling those loans, you have no way of shipping those loans. So what do you do? It has a ripple, exponential effect throughout the organization."
LOs, have you ramped up your cybersecurity practices, and how have you adapted them to a remote environment? Have you had any close calls? Has your production ever been impacted by wire fraud or ransomware attack? Send a note to gkromrei@housingwire.com.
Georgia Kromrei
Senior Mortgage Reporter, HousingWire
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