Q: What is Internal Audit and is it a requirement for mortgage lenders?

A: Internal Audit is a function within an organization that independently evaluates the risks to the organization and the control environment that the company has in place. Typically, Internal Audit reports to the Board of Directors or Senior Management and is separate from all other departments to ensure that their evaluation remains independent.

Internal Audit is required if you are approved or seeking approval from any GSE's. One of the most common findings coming out of a Fannie Mae MORA exam is a lack of sufficient internal audit protocols.