Tips to Prepare for Mortgage Audits

In light of the new regulatory environment, mortgage audits are more stressful than ever. Compliance means the difference between staying in business and folding up shop. Preparing for an audit, however, can be less stressful when you keep the following tips in mind.

Understand the Serious Nature of the Audit

It’s imperative for mortgage companies to view the audit process with gravity. “The CFPB represents a sea change in the regulatory environment for non-depository institutions, and the arsenal of regulatory and enforcement weapons at the agency’s disposal is unprecedented.” (1) The CFPB is likely the most powerful regulator the U.S. has known. In this new climate of regulations, there is little to no room for error. Mortgage companies should, therefore, exert every effort to comply with these regulations. One single bad loan, for instance, could land a company in hot water.

Perform a Mock Audit

Performing a mock audit is a great way to prepare for the real thing. Using automated compliance checks will help the company ensure that it is following regulations in every case. Use technology that “details and provides tools and reporting so that your lock desk staff can easily identify compliance issues.” (2) By operating with mortgage quality control software, you can ensure that you comply on a regular basis. Your mock audit will go smoothly with such software in place and allow you to easily and effectively prepare for the real one.

Review Company Policies and Procedures

During the onsite visit, auditors will speak with various employees such as the executive management team, departmental heads, and compliance representatives. It’s vital for these employees to review company policies and procedures in order to be ready for questions. Loan processors and underwriters should also be prepared for interviews with auditors.

By preparing staff and learning to rely on technology solutions, mortgage companies can effectively prepare for audits. It’s important to take every measure in order to ensure that your audit is a successful one.


1. Mortgage Compliance Magazine, “The New Regulatory Environment: Preparing for a CFPB Audit,” 
2. Loan Logics, “Comprehensive compliance data and reporting stands up to audit scrutiny,” 

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