Lenders Must Prepare For Cybersecurity Audits – NMP Skip to main content

Lenders Must Prepare For Cybersecurity Audits

Associate Editor
Dec 15, 2021

'As a lender you are responsible to regulators for your vendor’s adhering to regulations.' - Rob Chrisman

KEY TAKEAWAYS
  • President Joe Biden has issued an executive order that all agencies must adopt a multi-factor authentication (MFA) by mid-November 2021.
  • It has become imperative that cybersecurity is included as an audit plan for every organization. 
  • The purpose of cybersecurity audits is to assess compliance and identify vulnerabilities across digital infrastructures.
  • Not only will this help companies stay ahead of cyber criminals, but it also helps avoid fines. 

President Joe Biden has issued an executive order that all agencies must adopt a multi-factor authentication (MFA) by mid-November 2021. Leading up to the deadline, new regulations will be enforced, even as companies are currently struggling to meet the laws of compliance. It’s not enough to simply stay up to speed on compliance requirements; it has also become imperative that cybersecurity is included as an audit plan for every organization. 

The purpose of cybersecurity audits is to assess compliance and identify vulnerabilities across digital infrastructures. Not only will this help companies stay ahead of cyber criminals, but it also helps avoid fines. 

An on-site audit will entail an auditor – typically a third party vendor – checking your software’s configuration as well as running tests to analyze your network and identify any gaps. A network security audit is a great tool for highlighting potential solutions for strengthening security practices, controls, and mitigating risk. 

“Vendor management is its own discipline, but as a lender you are responsible to regulators for your vendor’s adhering to regulations,” said industry expert Rob Chrisman. “How are you monitoring your service providers? What are they, and you, going to do in the event of a data breach? Is your advertising compliant in terms of print size, color, and placement? Does your company allow team names (“The Jane Doe Team at ABC Mortgage”)? If so, does the name have to be filed with state or county or the NMLS as a DBA/trade name? The list goes on.”

An auditor will help your company understand which tools you need in order to meet compliance standards by taking detailed notes regarding the safety and effectiveness of your current IT tools. The auditor will provide a detailed report on the internal and external security systems, determine what changes need to be made, then allow companies to implement their new and improved defense plan. 

External auditors are extremely detailed but do not come cheap. Overall, it can be difficult to find an auditor with all the necessary qualifications. On the other hand, internal auditors are less expensive, easier to manage, and allow companies to gather data and set their own benchmarks in the auditing process. However, an internal audit can lead to potential bias, which is why audit committees and boards have been established to set expectations and mitigate any potential risks for internal audits. 

About the author
Associate Editor
Katie Jensen is a mortgage news reporter at NMP.
Published
Dec 15, 2021
New Appraisal Rules Could Vary By Lender Under GSE Exception

Fannie and Freddie are giving some lenders more time to adopt UAD 3.6, meaning mortgage brokers may need to navigate different appraisal requirements across wholesale partners

Credit-Score Competition Could Expand Beyond FICO, VantageScore

CHLA sees new Fannie and Freddie score disclosures as a first step toward more competition, while lenders are already finding different borrower outcomes under today's models

Mortgage AI Survey Finds Monitoring Gap At Smaller Lenders

Only 40% of smaller lenders surveyed reported ongoing AI monitoring, compared with 80% of larger lenders, as a new state examiner guide details the records regulators may request

Fannie Changes How Rent From A Former Home Counts

Fannie now prohibits leases for departing residences and permits market-analysis tools instead of Form 1007, creating a key documentation difference from Freddie Mac

ACES Targets Loans Traditional QC Samples May Miss

New population-testing technology applies lender-defined rules across selected origination and servicing records, then directs flagged files to human reviewers

Sep 21, 2026
The Risk Your Credit Score Can't See

Place-based market risk can produce dramatically different default outcomes among borrowers with nearly identical credit profiles

Sep 17, 2026