Imagine being ready to close escrow on the house of your dreams–but wait. The county recorder can’t record the sale. Why? A cyber attack has taken place.
This exact scenario happened in Cedar Rapids, Iowa just last month (reference). The county has been unable to update real estate records since before Christmas, including liens on properties and information about outstanding mortgages and loans. Let’s look at what this means for real estate sales in the affected counties and what it means for the real estate industry as a whole.
Cyber Attack Stops Real Estate Recording
The County Records office’s vendor to manage real estate records is facing a cyber-attack. It has the County Records office at a standstill with their hands tied.
If the cyber-attack continues, and the ability to update real estate records continues to be stalled, it could cause real estate closings to come to a halt. As the issue continues, many buyer groups do not trust outdated information in the home buying process, such as banks where people secure home mortgages.
Some smaller counties affected by the outage have been able to update their systems by hand while waiting for service to be restored. At the same time, other counties have too many properties to update manually.
The Effects of Ransomware on the Real Estate Industry
Ransomware can affect every industry in a variety of ways. The effects for the real estate industry aren’t the loss of life like a healthcare organization, but they affect people’s living situations and income.
- Bank Mortgage Approvals–the delay in real estate recording due to the cyber attack on the third-party processor affected people’s ability to stay ‘approved’ for their home loans.
- Close Dates– people often anticipate a particular move-in date based on the close of escrow and their mortgage loan terms. The inability to record the real estate transaction delays escrow and the sale’s closing, delaying the buyer’s move-in date.
- Interest Rate Locks–loan interest rate locks often have an expiration date, meaning that escrow needs to close the sale by a certain date to lock in a particular mortgage rate. If the delay in recording continues, this could affect buyers’ interest rates, drastically affecting monthly payments due to fluctuating interest rates.
IT Support for Real Estate
Whether you are a loan officer or a real estate office, PK Tech supports your business. We have provided managed IT and co-managed IT support and IT security solutions to businesses in the Greater Phoenix Area for over ten years. With the option to customize IT solutions to meet your specific business needs, we can help ensure your business doesn’t halt due to a cyber attack.
Get in touch with our team today.