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
FHA Sets Jan. 1 Start For FICO 10T And VantageScore 4.0

Lenders will gain competing modern scoring options, but borrowers may not see both offered everywhere

Sep 11, 2026
FHFA Studies Credit-Report Changes To Cut Mortgage Costs

Pulte’s comments could signal either fewer bureau reports or a portable report borrowers could share among lenders, but FHFA has not clarified which approach it is studying

AI Errors Leave Mortgage Trustee Without Brief In Foreclosure Appeal

Outside counsel’s fabricated citations expose a third-party oversight risk for mortgage servicers, trustees, and investors

Sep 10, 2026
CHLA Wants Ginnie Mae Liquidity Backstop Ready Before Next Crisis

Proposed G-TALF facility could help prevent a servicing cash crunch from constraining FHA, VA, and USDA lending

FHFA Opens VantageScore To All GSE Lenders, Eyes Credit Report Overhaul

Pulte removes 50-lender cap while considering bi-merge and single-bureau reports as additional ways to reduce mortgage costs

Closing Costs: What HUD’s Proposed Rule Will Really Do To The Market

HUD’s proposed rollback of housing protections could deepen barriers for underserved borrowers, shrink the pool of prospective homebuyers, and ultimately cost loan originators business

Aug 27, 2026