The Mortgage Bankers Association (MBA) is investing $2 million in MISMO, the Mortgage Industry’s Standards Organization, to support a range of new initiatives, including development of a uniform dataset for private label mortgage-backed securities; a standardized closing instructions template; harmonized remote online notary (RON) standards; common standards to encourage business-to-consumer communications on smartphones and tablets; and appraisal and rent roll standards for commercial and multifamily lenders.
MISMO is a standards body that has developed a common language for exchanging information for the mortgage process, which has become increasingly automated. It is a wholly owned subsidiary of the MBA. Today, MISMO standards are accepted and deployed by every type of entity involved in creating mortgages, and they are required by most regulators, housing agencies and the GSEs that participate in the industry.
“We hope that lenders, vendors and others across the mortgage industry will follow MBA’s lead by contributing additional funding and the human resources necessary to deliver the standards that will support innovation throughout the industry,” says Kurt Pfotenhauer, chairman of the board of directors for MISMO and vice chairman at First American Title Insurance, in a release.
“This investment will speed the development of industry-wide standards, benefiting lenders of all sizes and business models, by improving the integration and flow of data across the entire industry,” adds Mike Fratantoni, president of MISMO and chief economist and senior vice president of research and industry technology for the MBA.
In related news, MISMO has recommended the use of the Decision Model and Notation (DMNTM) standard for documentation, implementation, execution and exchange of business rules and decisions across the mortgage industry.
The DMN standard was developed by the Object Management Group (OMG), an international, open membership, not-for-profit technology standards consortium. DMN, when used in combination with existing MISMO standards, will enable mortgage industry participants to automate the exchange of business rules and decisions between partners, thereby reducing time and cost in the mortgage process.
“By integrating MISMO’s data standard with DMN, we facilitate decision as a service and enable new levels of integration and communication between mortgage industry partners. This moves MISMO closer to its vision of standardizing how the mortgage industry communicates,” explains Brian Stucky, CEO of DecisionX and co-chairman of MISMO’s decision modeling community of practice, in a release. “Sharing rules, along with the data used by the rule, will help address many of the interpretive and compliance issues that currently bedevil the mortgage industry. Understanding the rules used by business partners will help resolve differing interpretations and confusion, which in turn should greatly reduce costs across the industry.”
The combination of MISMO and DMN can be applied to any business rule or decision shared by mortgage lenders and third parties, including rules such as the ability to repay requirements, HMDA reporting requirements and servicing guidelines.
By using DMN standards, lenders could instantly integrate investor guidelines or other partner requirements into their business processes. This would replace the expensive and time-consuming process that is required today.
MISMO is planning a series of webinars and other resources designed to help lenders and other industry participants adopt the DMN standards.