Loan origination system (LOS) provider LendingQB and e-document technology provider International Document Systems (IDS) are among the first mortgage vendors to successfully implement the MISMO 3.3 data standard for document compliance.
The MISMO 3.0 standard was originally released in 2009 but was updated to version 3.3 in 2014 in order to reflect federal mortgage regulations and reporting requirements implemented by the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) rule, the companies explain in a press release.
The impact of MISMO 3.3 is, by and large, not visible to lenders, but it provides the framework and backbone for companies such as IDS and LendingQB to operate efficiently in the TRID environment.
“Utilizing the latest MISMO standard makes it easier for lenders to produce accurate and compliant mortgage documents,” says Daniel Miller, vice president of business development at IDS, in the release. “There is a tremendous amount of data that needs to be transferred between an LOS system and IDS in order to make sure lenders can render an accurate disclosure document. TRID introduced not only new fields, but an entirely different way of tracking fees.”
The previous Good Faith Estimate was a document that provided a static list of fees, each with its own defined data element. MISMO 3.3 is fundamentally different because fees are created dynamically, effectively requiring an infinite number of data elements.
Miller says many LOS vendors chose not to upgrade to the MISMO 3.3 standard and instead relied on awkward work-arounds in order to generate closing documents.
“Many vendors claim they are MISMO 3.3 compliant when, in actuality, they’re just packaging TRID data inside their existing MISMO 2.6 transmissions,” he says. “It may work in the short term, but it will create a cascade effect when there are any changes in the future. It will require us to fix each instance of an LOS vendor’s work-around in order for us to accurately generate documents. This creates an added layer of complexity and is antithetical to the purpose of MISMO.”