Ransomware puts title and mortgage industry at risk
Ransomware Attackers Hit Major Securities Industry Cloud Service Provider Cloud star, preventing countless loans from closing on Monday.
The ramifications for the securities and mortgage industry may extend beyond immediately affected loan applications. By late Monday afternoon, Cloudstar’s services were still offline.
In a statement, Cloudstar said it had previously brought in third-party experts to help with recovery efforts and had already alerted law enforcement. The company declined to provide a final restoration schedule. Experts said such incidents typically take 10 days to two weeks to resolve.
“We will continue to investigate this incident and provide updates to our customers as we have additional information to share,” a Cloudstar spokesperson said.
Cloudstar declined to specify the number of customers affected by the outage. But with Cloudstar services still offline on Monday, a large segment of the market might not be able to shut down. the American Land Titles Association said Cloudstar operates six data centers in the United States and has more than 42,000 users.
Ransomware refers to the use of malware, or malware, to render data systems unusable in order to charge a ransom. Cyber attackers usually pressure victims to pay the ransom to prevent data from being destroyed or made public.
In June, a Biden administration official wrote to business leaders warning them of the ransomware attacks. Anne Neuberger, deputy national security adviser for cyber and emerging technologies, wrote that the Biden administration would seek to disrupt cyber attacks, including holding “countries that host ransomware players” accountable. The letter also urged business leaders to take action to defend against cyber attacks.
“Many ransomware criminals are aggressive and sophisticated and will find the equivalent of unlocked doors,” Neuberger wrote.
John-Thomas Gaietto, Executive Director of Cyber Advisory Services at a Financial Services Company Richey May & Co, told HousingWire that it was no surprise that a service provider for the title industry was the target of the latest large-scale cyberattack.
“When we sit down and chat with leaders in the mortgage industry, the biggest concern is with the securities companies,” said Gaietto. “Some of them are still using hotmail’s personal webmail.”
The explosion radius of Cloudstar’s cyberattack could also extend beyond stalled mortgages. Financial services companies victimized by ransomware can expect lasting damage to their reputation and even regulatory fines if ransomware attackers publish consumer data. (Several Cloudstar competitors quickly offered their services to affected customers when news of the attack broke.)
The incident could also accelerate the consolidation of the title industry. Small businesses are unlikely to be able to afford the cost of protecting against cyber attacks, Gaietto said, let alone paying ransoms when incidents occur.
“Ransomware will become a much bigger dynamic in the industry,” Gaietto said. “And I just don’t see how small organizations continue to compete. “