The Federal Housing Finance Agency, Fannie Mae and Freddie Mac are developing a Uniform Mortgage Data Program that is expected to use more concise data parameters and consistent language to form a risk detection system that will drill down deeper into mortgage loans to highlight underlying risks early on. "The concept is simple: better data means better loans," said Patricia McClung, a vice president at Freddie Mac. McClung added, "Creating a common language through data standards that are used and understood by all stakeholders will help us identify potential defects earlier in the mortgage process, improving the quality of our mortgage purchases and reducing repurchase risk for lenders." McClung in a blog Monday said accurate data remains the missing link in developing a mortgage finance system where risks are alleviated early on to avert a financial crisis for homeowners and the industry. "Our data shows that loans with data defects – like appraisals that do not support property values and mortgage amounts that exceed maximum loan-to-value ratios – are more likely to become seriously delinquent within the first year," McClung wrote. In response to data concerns, the government-sponsored enterprises and FHFA are developing new data standards for appraisal and loan delivery first data using the Mortgage Industry Standards Maintenance Organization. MISMO is a nonprofit subsidiary of the Mortgage Bankers Association. The GSEs and FHFA also are developing clear and consistent definitions for appraisal and loan data to ensure the terms are understood industrywide. McClung believes data standardization will reduce costs and time, giving all parties involved in mortgage finance an opportunity to gauge the true value of the loans originated and purchased early on. Write to Kerri Panchuk.