Money Rehab with Nicole Lapin - How the Latest Ransomware Attack Could Affect Your Real Estate Deal

Episode Date: November 29, 2023

On this week's roundup of the headlines and how they affect your finances, Nicole decodes: the ransomware attack on Fidelity National Financial, the big drama at the huge crypto exchange Binance and how the Super Bowl of the shopping season went down for big retailers. Want to start investing, but don't know where to begin? Go to moneyassistant.com and meet Magnifi, your AI money assistant, designed to help you make a plan for your financial goals. Want one-on-one money coaching from Nicole? Book a meeting with her here: intro.co/moneynewsnetwork 

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. All right, here's your weekly roundup of the biggest headlines on Wall Street and how they affect your finances. Our first story is something of a sleeper unless it's directly impacting you, in which case it is probably all you can think about. I am talking about the breach over at Fidelity National Financial. Pause. Take a breath. I know

what you're thinking let me be super duper clear fidelity national financial is completely unrelated to fidelity investments the brokerage company however fidelity national financial is related to a whole bunch of other companies with fairly similar sounding names but again none of these are related to fidelity investments the brokerage company so we're not talking about the company that has your 401k. So just want to be really clear on that before I move on. Last week, Fidelity National Financial Company, which is a title insurance company and a real estate transaction service provider for the mortgage and insurance industry, suffered a major cybersecurity incident and suspended operations.

They filed the paperwork with the SEC and put all of their real estate transactions on hold. This has left home buyers, sellers, and real estate agents in a holding pattern while they wait for more information. Since mortgage underwriting is often the longest part of the process, a slowdown here means that things can actually go to a crawl. Fidelity National Financial, or FNF, owns many subsidiaries, including Fidelity National Title, National Title of New York, Fidelity National Title of California, Fidelity National Title of Hawaii, Chicago National Title. The list goes on and on and on. Because of all of the companies they own, the parent company, FNF, has over 30% of the market

share of title insurance for the entire United States. But let's back this up again with a couple of dictionary notes because the real estate industry just loves them some jargon. This story is a good opportunity to brush up on your real estate knowledge. Let's start with the basics. A deed is a document you sign, or more likely docu-sign, that gives you the title or ownership rights to a piece of property title insurance is backward insurance that protects the lenders and the home buyers during the sales specifically it protects them from lawsuits by people who believe that they have a claim on the property dating before the sale it even protects them from liens or legal

actions where the lien holder can claim the property as payment for debt. Title insurance can also protect the buyer in situations where there's a disputed title, like when there are issues with a will or perhaps the seller didn't actually have a solo claim on the title to the property. Almost all lenders require buyers to purchase title insurance as part of the property buying process. It is one of many, many fees and costs associated with buying a house beyond the down payment. But the FNF's involvement in the real estate industry goes way deeper than just title services. The company also offers other transaction services related to real estate, and initial reports suggest that at least some of

those companies were compromised or at least temporary halted as a result of the breach. While the transaction service websites were all up and running on Monday, many of the title insurance companies' websites were still down. We have reached out to the companies involved and we'll update you on this story if we hear back. If you're a listener who's been impacted by this, we would love to hear from you because if you've been caught up in all of this, I am so sorry. Buying a home is stressful enough without something like this freezing up the process. The good news is you should be just fine. It looks like this is a ransomware attack, and the biggest threat here is the exposure of information. No one is going to steal your house

from you. But do be proactive. Alert your bank. Talk to them about steps you should take. You don't want to do anything that's going to mess up your current transaction, of course, but you do want them to step up the monitoring. If you have a Gmail address, you can turn on the dark web monitoring service, which will alert you if your social security number shows up anywhere it shouldn't. Take a minute to update your passwords. I know, blah, blah, blah. But really start using two-step authentication, especially if you're in the home buying process. This is a solid plan of action if you have been exposed to any data breach, of course. If you are in the earlier stages of a real estate transaction, talk to your agent now to see if this

has any impact on you or them and if there are any steps you can take to avoid any other issues. Unfortunately, ransomware attacks are getting more and more common. Over the weekend, a major health services company was hit with an attack, and as a result, emergency rooms from New Jersey to New Mexico were turning away patients. Generally, the way ransomware attacks work is that the hackers break in, lock down the systems, and then demand a ransom to turn over the key to unlock the system. And what do they demand to be paid in? Could be unmarked bills, could be gold bars, probably crypto these days. There are almost more opinions on crypto

than there are types of coins, but one thing that is reasonably undeniable, crypto is extremely popular with people who do crime, not just high tech crimes, but old fashioned criminals like arms dealers and drug lords. They love them some crypto. It also plays an outsized role in human trafficking. There are even human trafficking rings built around crypto fraud. Enabling these crimes is why CZ, the founder of the crypto exchange Binance, is facing hundreds of millions of dollars in fines and potentially jail time. To zoom into this story, we're going to first need to zoom out a little. When it comes to crypto exchanges and the United States government, there are three tiers of crimes. Level one is selling unlicensed securities, which is a little complicated,

but essentially if someone is going to sell an investment vehicle, they need a license from the SEC. In most cases, companies creating cryptocurrencies need a license to sell their coins. And if they don't get one, that is a crime. Level two is processing crimes. In other words, allowing criminals to use crypto exchanges to finance their crimes. This happens on all exchanges to some extent, and sure, some criminals do have normal bank accounts as well. However, the expectation is that a bank will at least attempt to prevent funds within their institution being used for crime. And level three is some crypto exchanges are just guilty of fraud, which can take a lot of different ridiculous gambles with investors money from buying congressmen to land in the Bahamas.

Binance is theoretically guilty of the first crime and hasn't been accused of the third, but it's really the second level of crypto crime that's causing the biggest problem here. CZ and Binance are accused of not doing enough to prevent criminals from using their exchange to finance criminal activities. And by not doing enough, I mean not doing anything. The Department of Justice press release quotes a Binance compliance employee who wrote, perhaps jokingly, I don't know, that they need a banner welcoming money launderers. Yep. So in other words, the case is looking like a slam dunk for the DOJ. That also explains why the CEO voluntarily flew

back to the United States from his home in a non-extradition company to plead guilty and pay hundreds of millions of dollars in fines. Because the charges here are around Binance, allegedly allowing criminals to use their exchange and not the other common crimes of exchanges, Binance may simply feel that these fines and the ousted CEO are the price of doing business as a licensed company in Europe or even one day in the United States. So by agreeing to pay the fine and play nicely, they may hope to clean up their image. How this will play out, of course, is unknown. What is starting to become clear, though, is that there hasn't been a run on Binance.

While they have seen an uptick in customers withdrawing their money, it hasn't reached bank run level numbers just yet. And all available evidence suggests that Binance is sufficiently funded to withstand even that. Whatever happens in the next year, it is clear that the world's largest crypto exchange is entering a new era. Lastly, let's take a look at another big financial story on Wall Street, and that is the Super Bowl of the shopping season, Black Friday and Cyber Monday in review. Companies reported good numbers overall. Brick and mortar stores actually saw an increase in foot traffic year over year. And this reflects a bigger trend of all of us just wanting to do more things IRL instead of URL. For today's tip, you can take straight to the bank. As we get deeper into the holiday shopping season, do a little digital detox.

Brands are going to be emptying their end of year marketing budgets into social media marketing before the holidays, which means you are going to see a lot more tempting targeted ads for things you probably really don't need. So try to limit your exposure, try to put your phone down, and your wallet will probably thank you. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Loy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.

And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.