How Will You Protect Borrower Data in 2016? By Andrew Liput
DECEMBER 2015 n National Mortgage Professional Magazine n
“Data privacy” and “data security” are terms most lenders are hearing over and over again these days. The reasons for this are numerous, but include the Consumer Financial Protection Bureau’s (CFPB’s) focus on the issue, increased publicity over data breaches in business and industry, and heightened concern by consumers about how their sensitive non-public information is being managed by banks. Although data privacy and data security are terms that are commonly used interchangeably, they in fact mean different things. A data security policy is required to ensure that data privacy is protected. When a lender is entrusted with a borrower’s highly private information, the business must develop, implement and manage a security policy to protect this data. So data privacy identifies that personal and private information which must be protected and how it may be used in a business in an appropriate manner, while data security includes the means and methods used to ensure the security of the data both internally (from employee breaches) and externally (from third party breaches). Data privacy rules mean that lenders must define and police the appropriate use of borrower data within their walls. This includes what data is gathered (relevance to services), who has access (need to know), and where data is stored (how long and how safe). Both the CFPB and the Federal Trade Commission (FTC) have jurisdiction over the mishandling and misuse of consumer data, and each may enforce penalties against lenders that have failed to ensure the privacy of a borrower's data. At a minimum, lenders must screen employees with access to private data regularly, have an appropriate policy in place regarding handling of data, and test these policies on an ongoing basis. Data security encompasses your company’s practices and processes that are in in place to ensure data is not being used or accessed by unauthorized individuals or parties. It ensures that sensitive data is accurate and reliable and is available when those with authorized access need it. A data security plan includes facets, such as collecting only the required information, keeping it safe, and destroying any information that is no longer needed. These steps will help any business meet the legal obligations of possessing sensitive data. A data security policy is simply the means to the desired end, which is data privacy. However, no data security policy can completely overcome the efforts of third parties bent on hacking into databases and seeking access to consumer data to monetize for improper and illegal purposes. At a minimum, lenders must develop written data security policies that include safe storage of data and penetration testing of their backup systems (local and/or cloud) to search for gaps and leakage. Knowing that there is no such thing as a foolproof data security system and that all systems are ultimately vulnerable to breach by determined criminals, lenders must demonstrate a commitment to adopting the most stringent policies relevant to the size and scope of their business, while also considering purchasing crimes and cyber liability insurance to offload risk in the event of unexpected and unintended breaches. Making sure all borrower data is private and being used properly can be a near-impossible task that involves multiple layers of security. Fortunately, with the right people, process and technology, lenders may support their data security policies through continual monitoring and visibility into every access point and with insurance back-up. Andrew Liput is CEO of Secure Insight, a risk analytics firm offering vendor management services addressing settlement agent risk. He can be reached by e-mail at ALiput@SecureSettlements.com.
heard on the street continued from page 52
result of the ownership of Finance of America Reverse and the recent acquisition of several additional mortgage entities which are part of Finance of America Mortgage LLC, the Finance of America companies have become one of the largest non-bank originators in the U.S. “Unifying the Finance of America Holdings brands is a key step in establishing the wide diversity of products and services available to our customers. Finance of America will be synonymous with all types of lending, and reverse mortgages are a key component of that business. Changing our name also increases transparency and assists us in placing all consumers into the product that best serves their lifestyle,” said Kristen Sieffert, President of Finance of America Reverse. Finance of America Reverse was founded in 2003 and has licensed retail and wholesale divisions in most U.S. states and Puerto Rico.
Top Vine Mortgage Services Opens Its Doors Top Vine Mortgage Services LLC has announced the launch of its business in Watchung, N.J., led by Managing Partners Tom Pasckvale and Vinnie Cervo. The official opening was marked with a ribbon-cutting ceremony officiated by Watchung Mayor Stephen Pote, who offered his best wishes and thanked the partners for bringing their business to the area. Cervo and Pasckvale have been in the industry for nearly 20 years combined and have found that now is the time to take this next venture as the real estate market continues to be hot. “We are excited to embrace this opportunity and bring our experience to the next level. We greatly appreciate the relationships that we have built as a result of being in the industry for so long,” said Pasckvale. “Our team has strong values and beliefs that are at the core of how we live. Top Vine’s platform of always putting customers first and educating them along the way is a true testament to the values we practice in our own lives.” “We pride ourselves on offering customers great service and solid financial advice,” said Cervo. “While the industry can be challenging to navigate, mortgage rates remain at historic lows. We look forward to helping customers get the best rates available in the states where we plan to be licensed (NJ, NY, PA, CT and FL).”
Mortgage Professionals to Watch Klosterman has joined l Kevin CoesterVMS. With more than 25 years of experience in valuations, Klosterman will be responsible for training CoesterVMS’ national network of appraisers regarding the company’s existing and new valuation products. He also will be instrumental in the
development of future applications. Mortgage Insurance l National Corporation (National MI), a subsidiary of NMI Holdings Inc., has announced that Dana Abernathy, senior account manager, was named chairman of the Mortgage Banker Association’s (MBA’s) Certified Mortgage Banker (CMB) Society. l Valuation Partners has hired two veteran mortgage industry executives to help prepare for the company’s future growth: Jim Davis will be responsible for overseeing the accounts of all servicing clients in the new position of managing director of Loan Servicing, and David Raskin has been named chief valuation officer, responsible for overseeing all valuation decisions provided through the company’s products and services. l Paramount Residential Mortgage Group Inc. (PRMG) has announced the recent promotion of Chris Sorensen to SVP, national director of Retail Production. Chris brings with him more than 27 years of experience in both real estate and retail mortgage banking. l Amy Ramsey has joined Indecomm Global Services, a provider of mortgage technology, training and outsourcing services, as national sales manager for the Mortgage Learning Division. Amy will be responsible for Indecomm Education, Professional Services, Consulting and Doc Management Solutions. l imortgage, a division of loanDepot LLC, has announced the appointment of Kevin Budde as senior vice president of production for the West Division, and Tom Fiddler, senior vice president of production, East Division. l GSF Mortgage has announced that Leo Spanuello has been named regional manager in GSF’s Brookfield, Wis. branch office, joining GSF with 22 years of experience. GSF has also announced its expansion into the state of Ohio, welcoming Michael Bardy as branch manager in the new Medina, Ohio office. GSF Mortgage has announced the addition of Debra Castellano as mortgage loan originator in Nashville, Tenn., joining GSF with 25 years of mortgage and real estate experience. GSF has also added Branch Manager Khari Nixon in Carmel, Ind., joining GSF with 19 years of industry experience. GSF Mortgage has appointed Marcela Hurtado as branch manager in GSF’s Huntington Beach, Calif. office. The company has also added Beckie Ford as mortgage loan originator in continued on page 72