When policymakers talk about housing affordability, the focus is usually on interest rates, inventory shortages, zoning reform, or construction costs. All are important. But one factor rarely making the conversation is fraud prevention – and the quiet role the title insurance industry plays in keeping housing attainable.
Fraud may sound like a peripheral issue in a market defined by supply and demand, but it has real, measurable consequences for homebuyers, lenders, and communities. When fraud increases, costs rise and affordability suffers.
According to the FBI, consumers lost at least $13 billion to cyber-related fraud in 2024. Likewise, the Financial Crimes Enforcement Network reported financial institutions filed 2.1 million suspicious activity reports related to fraud in 2025. This is all on top of the money that businesses like title companies spend every day trying to stay ahead of the curve.
The administration has increasingly, and appropriately, emphasized combating fraud as part of its broader affordability efforts. In the real estate market, fraud – such as appraisal manipulation, mortgage fraud, title theft, and deceptive investment practices – can artificially inflate home prices, alter supply and demand, and undermine trust in the housing system, particularly for first-time homebuyers, homeowners, and middle-income households.
Earlier this month, Treasury Secretary Scott Bessent announced a new set of enforcement measures aimed at identifying and investigating fraud in Minnesota. The administration also announced the creation of the Department of Justice’s new division for national fraud enforcement, which will be responsible for leading the department’s efforts to investigate, prosecute, and remedy fraud.
The U.S. real estate transaction system is a prime target for increasingly sophisticated fraud schemes, including wire fraud, identity theft, forged deeds, and impersonation scams. Each successful attack doesn’t just hurt an individual buyer or lender; it injects risk into the entire housing ecosystem. Real estate fraud resulted in nearly $175 million in losses in 2024, according to FBI data.
Title professionals serve as one of the housing finance system’s most important lines of defense. Title insurance and the industry’s fraud-prevention protocols help contain the damage. Companies invest heavily in secure processes, employee training, verification procedures, and consumer education to help prevent fraud. These investments are critical to stopping criminals. Title professionals also respond quickly when fraud is detected, working with banks and law enforcement to recover funds.
Those preventive investments reduce systemic losses – and lower losses translate into lower costs for everyone.
Without title insurance and the expertise of title professionals, the cost of fraud would be borne elsewhere. Lenders would price increased risk into higher interest rates or tighter credit standards. Buyers would face higher legal costs, increased down payments or outright denial of financing. Investors would demand higher returns to compensate for uncertainty, driving up borrowing costs across the system.
In other words, fraud doesn’t disappear when protections are removed. It simply gets passed on to consumers.
Consider wire fraud, now one of the fastest-growing threats in residential real estate. Criminals impersonate banks, settlement companies, or even real estate agents to redirect closing funds. The average loss from a successful wire fraud incident exceeds $100,000 – often representing a buyer’s life savings.
Fraud and forgery claims represent 21% of total dollars spent by title insurers on claims expense and losses, with an average claim cost of over $143,000. This risk is even higher on refinances, as the average cost for fraud and forgery claims is $207,000 – almost seven times higher than all other types of claims resulting from refinance transactions.
From a policy perspective, protecting housing affordability means protecting consumers from hidden costs. Fraud is one of the most destabilizing hidden costs in the system. The stronger the fraud-prevention infrastructure, the more stable and affordable the market becomes.
As lawmakers look for ways to expand access to homeownership, they should recognize the role of behind-the-scenes safeguards that keep transactions functioning smoothly. Title insurance is not just a transactional product – it is part of the financial plumbing that allows the housing market to operate at scale without transferring excessive risk to families.
Housing affordability is about more than prices and rates. It’s about trust, stability, and protection. In that equation, fraud prevention and the professionals who help combat criminal activity and protect the integrity of every real estate transaction in America matter more than most people realize.
