idBUSINESS for Mortgage Professionals

Mortgage Industry Overview July 10, 2009 1

Our goals today 2

Our goals today ‣ To give you the WHAT… 2

Our goals today ‣ To give you the WHAT… ‣ The FTC’s Red Flag Rules 2

Our goals today ‣ To give you the WHAT… ‣ The FTC’s Red Flag Rules ‣ ...review the HOW… 2

Our goals today ‣ To give you the WHAT… ‣ The FTC’s Red Flag Rules ‣ ...review the HOW… ‣ demo the idBUSINESS Red Flag Compliance Module 2

Our goals today ‣ To give you the WHAT… ‣ The FTC’s Red Flag Rules ‣ ...review the HOW… ‣ demo the idBUSINESS Red Flag Compliance Module ‣ but also give you the WHY 2

Our goals today ‣ To give you the WHAT… ‣ The FTC’s Red Flag Rules ‣ ...review the HOW… ‣ demo the idBUSINESS Red Flag Compliance Module ‣ but also give you the WHY ‣ Why information security is an OPPORTUNITY, not a burden 2

FILE CABINETS??? 3

The PII Lifecycle - MORTGAGE 4

The Opportunity ‣ There is a unique opportunity to grow a mortgage business by leveraging strong information security policy and sharing it with borrowers ‣ Build trust with borrowers ‣ Strengthen employee relationships ‣ Tighten lender/broker operations 5

The Risk ‣ The mortgage industry has a unique burden to protect borrower information ‣ Government mandate for regulation ‣ Financial industry scrutiny ‣ The Consumer’s Age of Transparency 6

The facts 30% 40% 60% 70% Business has suffered breach Thief is employee or knows employee Business has yet to incur a breach Thief is unknown • Since 2/15/05, over 251,000,000 Americans have had identities or other personal information compromised 7

The facts The average breach and its impact on customer confidence is growing. 58% of customers will lose conﬁdence in your business after a breach. 31% of your customers will immediately cease doing business with you following a breach. Source: Ponemon Institute, 2008. 8

The Red Flag Rules 9

The Red Flag Rules ‣ Sections 114 & 315 of the Fair and Accurate Credit Transactions Act 9

The Red Flag Rules ‣ Sections 114 & 315 of the Fair and Accurate Credit Transactions Act ‣ Applies to you if: 9

The Red Flag Rules ‣ Sections 114 & 315 of the Fair and Accurate Credit Transactions Act ‣ Applies to you if: ‣ you hold “covered accounts” 9

The Red Flag Rules ‣ Sections 114 & 315 of the Fair and Accurate Credit Transactions Act ‣ Applies to you if: ‣ you hold “covered accounts” ‣ your customer records present a “reasonably foreseeable risk of identity theft” 9

Why are mortgage cos. COVERED ENTITIES? ‣ Deferring payment ‣ The mortgage process is by definition a deferred payment and credit-granting process ‣ Reasonably foreseeable risk ‣ Borrower files are a treasure trove ‣ Each record worth between $80-300 each* * Source: Black Market Identity Auction attended by Net Reaction mole, 2008. 10

Red Flag REQUIREMENTS 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 2. Controls to prevent and mitigate the risks associated with identity theft 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 2. Controls to prevent and mitigate the risks associated with identity theft 3. Must be administered by a board of directors or a member of senior management 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 2. Controls to prevent and mitigate the risks associated with identity theft 3. Must be administered by a board of directors or a member of senior management 4. Must deliver compliance report on at least an annual basis 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 2. Controls to prevent and mitigate the risks associated with identity theft 3. Must be administered by a board of directors or a member of senior management 4. Must deliver compliance report on at least an annual basis 5. Must contain mechanism to train employees 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 2. Controls to prevent and mitigate the risks associated with identity theft 3. Must be administered by a board of directors or a member of senior management 4. Must deliver compliance report on at least an annual basis 5. Must contain mechanism to train employees 6. Must contain an incident response capability 11

Red Flag REQUIREMENTS 1. A Written Information Security Program 2. Controls to prevent and mitigate the risks associated with identity theft 3. Must be administered by a board of directors or a member of senior management 4. Must deliver compliance report on at least an annual basis 5. Must contain mechanism to train employees 6. Must contain an incident response capability 7. Must ensure that vendors and suppliers are also compliant 11

“What happens if I don’t comply?” • Legal liability – Civil lawsuits, class-action litigation • Government penalties – FTC & State enforcement • Damage to brand reputation and borrower trust 12

The solution ‣ The idBUSINESS Red Flag Compliance Module ‣ Built on real-world forensic fieldwork ‣ Includes tools & benefits that actively involve employees in your compliance efforts ‣ Transitions information security from a compliance issue into a competitive advantage 13

The Red Flag Compliance Module ‣ Secure online interface 14

The Red Flag Compliance Module ‣ Learning tools available as text or video webinar 15

The Red Flag Compliance Module ‣ Risk Assessment tool provides ranking of your company in 12 key focus areas 16

The Red Flag Compliance Module ‣ Customizable checklist of 26 Red Flags to meet requirements of FACT Act 17

The Red Flag Compliance Module ‣ Employee training automated & easy, integrates automatically with your compliance report 18

The Red Flag Compliance Module ‣ Ability to evaluate supplier compliance practices using our proprietary Vendor Integrity Assessment 19

The Red Flag Compliance Module ‣ Access individual identity recovery protection using FraudStop and Restore from ID Experts ‣ Available as employee benefit, cafeteria-style add-on, customer blanket, or new revenue stream ‣ In the event of a breach, one-click access to best-in- breed data breach services and forensic services 20

Mortgage Industry BENEFITS ‣ NAMB Preferred Provider ‣ www.majesticsecurityidsafe.com ‣ Because We Care ‣ www.mortgagedashboard.com ‣ Mortgage Insurance Agency ‣ www.mtgins.com 21

“Can’t I do this myself?” • A self-written policy meets the letter of the law, but leaves gaps: – No vendor integrity assessment – No employee training, just signature line – No mitigation of damages in the event of an incident • Who will you call when you have a question? • No context of how Red Flag Policy fits into your business – What’s worth doing is worth doing right. – Missing an opportunity to GROW your business 22

So I’m compliant... ‣ NOW WHAT? ‣ Don’t let it sit on a shelf ‣ Talk to your employees ‣ Talk to your borrowers ‣ Use your policy as a business-building tool 23

The file cabinets? 24

Thank you! 25

idBUSINESS for Mortgage Professionals

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