Fraud flags have stayed above 40% of files for five straight quarters

FundingShield's first-quarter screen flagged 43.72% of transactions in a $106.7 billion portfolio. That is an improvement on the record it set last autumn, and it is still four files in ten.

Key points

FundingShield flagged 43.72% of transactions in a $106.7 billion portfolio in its first-quarter 2026 report.

Its third-quarter 2025 report flagged 46.6% of an approximately $90 billion portfolio, a record high and up 35% on the prior quarter.

That quarter averaged 3.1 issues per flagged transaction.

FundingShield screens its own client portfolio, so the rate describes files already under review, not the whole market.

The FBI's Internet Crime Complaint Center remains the independent counterweight to any vendor figure.

A transaction coordinator does not need a fraud statistic to know the closing week is the exposed one. It is the week the wire instructions move, the week five parties email each other in a hurry, and the week a plausible message from a familiar name is least likely to be questioned. What the last five quarters of FundingShield reporting add is a sense of scale.

The firm's first-quarter 2026 report flagged 43.72% of transactions in a portfolio it puts at $106.7 billion. That is down from the record set two quarters earlier: in the report published on 16 October 2025, FundingShield said nearly 46.6% of transactions in an approximately $90 billion portfolio were flagged for issues posing significant wire and title fraud risk, a rise of 35% on the previous quarter, with an average of 3.1 issues per flagged transaction.

The reported figures

Q1 2026 flag rate: 43.72% (Portfolio of $106.7 billion)

Q3 2025 flag rate: 46.6% (Portfolio of roughly $90 billion, a record high)

Issues per flagged file: 3.1 (Q3 2025 average)

Quarter-on-quarter change: +35% (Q3 2025 against Q2 2025)

What the number is, and what it is not

FundingShield screens files for its own clients. The portfolio it reports on is therefore a set of transactions that lenders and title firms already decided were worth checking, not a random sample of American closings. A flag is also not a loss. It records a mismatch worth resolving: a wire instruction that does not tie to a verified account, a closing agent whose licence or insurance does not check out, a party detail that fails validation.

Read that way, the figure is still useful to a coordinator. It says that on files where somebody bothered to look, something was wrong more often than not far short of half the time, quarter after quarter, across two very different rate environments. It does not say that four in ten American closings are compromised, and any story that says so is misreading it.

Where the independent number sits

The FBI's Internet Crime Complaint Center publishes the only figure in this area that no vendor has an interest in. Its 2024 annual report, released on 23 April 2025, recorded $16.6 billion in total reported losses, a 33% rise on 2023, including $2.77 billion attributed to business email compromise across 21,442 complaints. The 2025 report puts total reported losses at $20.877 billion across 1,008,597 complaints.

IC3 counts complaints, which means it undercounts: it captures what victims reported to the FBI, in the categories the FBI uses. Business email compromise is the category that covers the diverted-wire scenario a coordinator would recognise, and it is not real estate specific. Neither dataset alone describes the closing table. Together they bracket it.

How we handle vendor data. TC Bulletin reports vendor fraud statistics with the vendor named, the portfolio described, and the FBI IC3 figure alongside. We do not run a vendor number as a market-wide rate.

The practical read for a coordinator

Treat any change to wire instructions as a new instruction, not an amendment, and verify it by a phone number you already had on file.

The verification call happens before the file is touched, not after the client asks whether the email was real.

Log the verification in the file. Where a claim follows, the file is the record of what was done and when.

Send the fraud warning at the start of the transaction, when the client is still reading everything you send, not in the closing week when they are skimming.

Primary sources for this story

FundingShield quarterly wire and title fraud risk reports Q3 2025 report published 16 October 2025; Q1 2026 report

FBI Internet Crime Complaint Center annual reports 2024 report released 23 April 2025; 2025 report

HousingWire coverage of the Q3 2025 report Published under the headline on mortgage fraud in Q3 2025

Sources cited

FundingShield

FBI IC3 annual reports

HousingWire