Increased IRS Data Security Slows Mortgage Application Process
After the Equifax breach this past fall in which hackers stole the personal information of 143 million U.S. consumers, the credit reporting industry is going to greater length to protect consumer data from cybersecurity threats. In an effort to safeguard sensitive data, the Internal Revenue Service recently beefed up security of their Income Verification Express System (IVES), which lenders use to verify loan applicants’ income and assets. While seemingly a positive move towards safer practices, the increased protections have slowed the mortgage application process by as much as four days in some instances.
According to National Mortgage News, “IRS officials told anxious industry group executives that they were working to address the problem, which many fear will significantly delay mortgage closings.” The delays can be attributed to extra security steps. For example, “to verify that a person making a request for a transcript is authorized, the new system requires the IRS to send a security code to a personally attached device. That added a manual component to the request process.”
While many lenders are frustrated with the now-sluggish process, it’s important to keep in mind the alternative. Without increased securities, giant data breaches will increase in frequency and severity. With the potential to decrease consumer confidence and willingness to borrow, rampant cybersecurity hacks are a threat to the legitimacy of the home lending industry as whole. For tips on how to protect your business against data theft, read our blog titled Cybersecurity Advice for Lenders | Simple Tips for Increased Protection.
Janus AMC is following the IVES delay situation and will keep you informed on the latest updates. Check back soon for more mortgage and compliance news.