Ransomware puts stocks and mortgage industry at risk
Ransomware attackers hit major cloud service providers in the title industry Cloud starwhich closes an untold number of loans on Monday.
The impact on the title and mortgage industry can extend beyond the loan applications directly affected. By late Monday afternoon, Cloudstar’s services were still offline.
In a statement, Cloudstar said it has already brought in outside experts to assist with the recovery effort and has already alerted law enforcement agencies. The company declined to provide a final restoration schedule. Experts said that it usually takes 10 days to two weeks to resolve such incidents.
“We will continue to investigate this incident and provide updates to our customers as we have additional information,” said a Cloudstar spokesman.
Cloudstar declined to indicate how many clients were affected by the outage. But with Cloudstar services still offline on Monday, much of the market might not be able to close. The American Land Title Association said Cloudstar operates six data centers in the United States and has more than 42,000 users.
Ransomware refers to the use of malicious software or malware to break data systems in order to demand a ransom. Cyber attackers typically pressurize victims to pay the ransom in order to prevent data from being destroyed or made available to the public.
In June, a Biden government official wrote to business leaders warning of ransomware attacks. Anne Neuberger, deputy national security advisor for cyber and new technologies, wrote that the Biden government will try to prevent cyberattacks – among other things by “holding countries that harbor ransomware actors accountable”. The letter also urged business leaders to take steps to deter cyberattacks.
“Many ransomware criminals are aggressive and sophisticated and find the equivalent of unlocking doors,” wrote Neuberger.
John-Thomas Gaietto, Executive Director of Cyber Advisory Services at a financial services company Richey May & Co, HousingWire said it was no surprise that a title industry service provider was the target of the recent large-scale cyberattack.
“When we sit down and speak to senior mortgage industry leaders, title companies are the biggest concern,” said Gaietto. “Some of them still use Hotmail personal webmail.”
Cloudstar cyberattacks could also explode beyond deadlocked mortgage loans. Financial services companies that fall victim to ransomware face permanent reputational damage and even fines for ransomware attackers exposing consumer data. (Several of Cloudstar’s competitors were quick to offer their services to affected customers when news of the attack became known.)
The incident could also further accelerate consolidation in the title industry. Smaller businesses are unlikely to be able to afford the cost of protecting themselves from cyberattacks, Gaietto said, let alone paying ransom when incidents do occur.
“Ransomware is becoming a much more important dynamic in the industry,” said Gaietto. “And I just don’t see how smaller companies continue to compete.”