Unprecedented series of assaults on mortgage industry highlights widespread vulnerabilities
In the digital age, the financial sector, particularly the mortgage industry, faces a growing array of cyber threats. The Treasury Department has acknowledged that financial sector organizations often use commodity software products and networking devices with known vulnerabilities, making them potential targets for cybercriminals.
Last year, organizations in healthcare, financial services, education, and manufacturing experienced the highest number of data compromises, according to the Identity Theft Resource Center. These attacks resulted in delayed closing times on new loans and prevented customers from making payments.
Common attack vectors targeting financial services organizations, and specifically the mortgage industry, include phishing and social engineering, ransomware attacks, exploitation of software vulnerabilities, and insecure third-party integrations. Recent ransomware gangs like Dire Wolf have combined data encryption with theft and public exposure to maximize financial extortion.
Mortgage software often suffers from weak spots in four key layers: the code, third-party integrations, servers, and databases. Cybercriminals exploit these vulnerabilities to compromise applications, disrupt systems, and corrupt files. Moreover, AI-powered attacks have become more sophisticated, enabling targeted phishing and voice deepfakes that make social engineering more effective.
Notable examples include ransomware attacks on mortgage giants such as LoanDepot and Mr. Cooper, which led to major data breaches affecting millions of customers and caused significant operational disruption and financial losses. Beyond IT systems, financial institutions also face risks through unsecured IoT systems like building automation, which can serve as gateways for cyberattacks.
To improve security outcomes, technology manufacturers can implement secure coding practices and rigorous testing, enhance authentication methods, develop device usage policies and secure remote access mechanisms, leverage AI and machine learning defensively, secure non-IT systems, and support compliance with evolving financial regulations. These combined efforts can help financial services, particularly in the mortgage sector, mitigate common and emerging cyber threats and strengthen business continuity and customer data protection.
Experts note that organizations have to meet their own responsibilities internally to thwart or mitigate attacks. The financial sector's built-in reliance on rapid transaction processing and turnaround times plays into threat actors' objectives. Financial incentives often play a pivotal role in making certain industries attractive targets for cyberattacks.
The Treasury Department works with government partners and financial institutions involved in real estate, and this includes relevant information sharing, exercises, incident coordination, risk identification, and the development of policies to improve the sector's security and resilience. Part of CISA's remit is to provide support to all 16 critical infrastructure sectors, including financial services.
The Treasury Department's Office of Cybersecurity and Critical Infrastructure Protection is tracking these incidents. The attacks seem to be opportunistic, rather than a concentrated effort to target the mortgage industry specifically. The financial impact and the pressure that interrupting financial transactions impart on financial organizations make them more likely to comply with ransomware demands.
In conclusion, strengthening cybersecurity in the mortgage sector is a shared responsibility between technology manufacturers, financial institutions, and government partners. By addressing vulnerabilities, enhancing authentication methods, securing non-IT systems, and supporting compliance with evolving financial regulations, we can create a more secure digital environment for the financial sector and protect sensitive corporate and customer data.
- The financial sector, especially the mortgage industry, is frequently threatened by a myriad of cyber threats due to the use of commodity software products and networking devices with known vulnerabilities.
- Last year, the healthcare, financial services, education, and manufacturing sectors faced the highest number of data compromises, leading to delayed loan closings and prevented payments.
- Common attack vectors for financial services, including the mortgage industry, are phishing, ransomware attacks, exploitation of software vulnerabilities, and insecure third-party integrations.
- To mitigate these threats, technology manufacturers should implement secure coding practices, rigorous testing, enhanced authentication methods, device usage policies, secure remote access mechanisms, and secure non-IT systems.
- Financial organizations must also take responsibility by addressing vulnerabilities, enhancing authentication methods, securing non-IT systems, and complying with evolving financial regulations.
- Government partners, like the Treasury Department and CISA, collaborate with financial institutions to share information, conduct exercises, coordinate incidents, identify risks, and develop policies to improve the sector's security and resilience.
