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77 January 2025 J O U R N A L January 2025 » Closing Protection Letter (CPL) Errors Soar The report revealed record-high er- ror rates for Closing Protection Letters, with 45.1% of transactions impacted. Issues ranged from borrower informa- tion and property addresses to vested parties and non-borrowing titleholders. These errors highlight the persistent lack of alignment between lender and title systems. Compounding the problem, CPL validation errors affected 9.6% of transactions in Q3. Wire Fraud Risk Persists Wire-related errors were identified in 8.1% of transactions, marking the fourth consecutive quarter where this category exceeded 8%. The report also noted a 24% surge in licensing issues, with numerous entities found to have expired, terminated, or suspended li- censes. Discrepancies across registrars, insurance regulators, and licensing bodies further complicate the indus- try's ability to maintain data integrity. Broader Implications of Data Breaches Industry vulnerabilities are magni- fied by broader cybersecurity threats. For example, a recent AT&T breach exposed the personal data of 73 million customers, including Social Security numbers and payment details. Such incidents provide bad actors with tools to execute sophisticated fraud schemes, making detection and prevention even more challenging. The Role of Data Accuracy in Transformation As the real estate finance industry undergoes digital transformation, the importance of accurate data cannot be overstated. Automation and AI-driv- en solutions promise efficiency and improved customer experiences, but their success depends on real-time data validation and robust source data ver- ification. Without these foundations, automation risks amplifying existing vulnerabilities rather than resolving them. Key Q3 2024 Metrics Compared to Q2 2024 • Record Issues Per Loan: Prob- lematic transactions averaged 2.23 issues, a new high. • CPL Errors: Affected 45.1% of trans- actions, setting another record. • Wire Fraud Risk: 1% of transac- tions were impacted, consistent with the previous three quarters. • License Issues: Increased by 24% from Q2. • Title System Discrepancies: CPL validation and title file order issues remained near their all-time high at 9.6%. Addressing Challenges Ahead The Q3 report underscores the need for heightened vigilance in data man- agement and verification processes. By prioritizing accurate data and leveraging advanced technology, the mortgage and real estate finance industry can better protect against fraud and ensure smooth- er transactions for all stakeholders.