The Mortgage Bankers Association announced MISMO, the mortgage industry standards maintenance organization, is requesting feedback from the mortgage industry on its new closing instruction industry standards.
The MBA explained the new closing standards will be designed to improve communication and avoid delays during the closing process. Currently, there is no standard lender template for closing instructions which shows how funds should be wired or disbursed and where the closing package should be sent; MISMO is looking to change that.
“Closing instructions are critical for successful mortgage transactions, but there is no consistency in format from lender to lender,” said Rick Hill, MISMO executive vice president and MBA vice president of industry technology. “Lenders don’t need to have the same instructions.”
“But much like newspapers are organized into sections, it would be enormously beneficial if closing instructions followed a standard format so everybody can find the information they are looking for,” Hill said. “We look forward to collaborating with all organizations and industry groups in this effort, so that we may create a template that works for everyone.”
Each lender uses a different format and causes confusion among settlement service providers in real estate providers. This confusion may often lead to errors and delays that require last-minute changes or post-closing corrections.
The MBA explained that a standard template for closing instructions will ensure the same type of information can be found in the same place on every lender’s closing instructions.
“Developing a standard template for closing instructions will bring greater clarity to the closing process and should result in fewer last minute hurdles,” said Justin Ailes, American Land Title Association vice president of government and regulatory affairs. “We look forward to partnering with MISMO and other organizations on this important endeavor.”
MISMO encouraged companies who want to collaborate on the new standard closing instructions can participate in its Closing Instruction Workgroup.
The workgroup will be responsible for creating a common closing instructions template, instructions for its day to day use, implementation guidance for lenders, closing agents and vendors and a data exchange standard that permits the electronic exchange of closing instructions. Regular workgroup meetings will be conducted via conference call and in person at MISMO Summits, which are held three times a year.