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Closing

MISMO to prioritize eMortgages in 2021

New president Seth Appleton lays out the vision for MISMO

This year, eClosings surged as remote online notarization became more popular and consumers looked for alternative ways to close on a home. Moving forward, the Mortgage Industry Standards Maintenance Organization, a not-for-profit subsidiary of the Mortgage Bankers Association, will continue to focus on digital closings.

Over the final months of 2020, MISMO saw the number of companies with its RON certificate double to a total of eight companies.

As MISMO starts its new year under its first full-time president, Seth Appleton, the company was clear that the digital mortgage will be one of its top priorities.

“We’re going to be focused on all things digital mortgage including eNotes, data eRecording information and eNotarization,” Appleton said in an interview with HousingWire. “We’re going to be looking at closing instructions and other interoperability mechanisms to exchange data more seamlessly. We’re going to be focused on building next-generation technology so not just the data standards, but the technology platforms that allow them to be used most efficiently, including the next generation of application programming interfaces or APIs and other data exchanges, because we think these will lower integration costs and speed up implementation timelines.”

MBA President and CEO Bob Broeksmit explained that Appleton was brought on in order to usher MISMO and the housing industry into the digital future. Before starting as president of MISMO on Dec. 1, he served as the assistant secretary of policy development and research for the U.S. Department of Housing and Urban Development and as the principal executive vice president of Ginnie Mae.

Here’s what Appleton says MISMO has in store for RON and eClosings in the year ahead. This interview has been edited lightly for length and clarity.

HousingWire: What are you looking to accomplish for RON standards, and what kind of growth do you expect to see this year?

Seth Appleton: We’re going to continue to see growth in that field. Certifications continue to be popular, we have eight companies that are now RON certified by MISMO. The certification program uses a uniform method to assess providers’ compliance with MISMO RON standards, and delivers consistent assessment across all providers. So it’s really designed to support the integrity and appeal of all the eMortgages and reduces and eliminates the burden on providers for individual assessment certification and approval.

And I should also point out that, as different states and localities have looked at RON, the MISMO standards are really the underpinning of a lot of that activity. And it’s really allowed the market to flourish, and we think that there’s only upward trajectory in 2021 for remote online notarization and MISMO’s certification program.

HW: What incentive do companies have to go through the MISMO RON certification process?

SA: If you look at other industries out there, the telecommunications industry or the computer industry are two good examples. In the computer industry you have USB functionality. USB drive developed from standards organizations. Right now, it doesn’t matter who makes your laptop, what the hardware is, what software you’re running, your operating system – if you have a USB drive, you are able to take data and transfer it and access it on another device. Telecommunication, same thing. A developer or standard-setting organization allows different devices to communicate with each other in the same language.

And that’s really what we’re trying to accomplish with all of this in the mortgage industry. It’s an industry that spends a considerable sum every year on technology and innovation. But, even though some parts of the mortgage finance process have benefited from that technology and become more automated, there’s still a lot of manual interaction because of the proprietary nature of the systems that are being developed.

And ultimately, that requires more time and more resources to be spent on all different aspects of the mortgage process. And so, there is a benefit for lenders, particularly if they’re able to exchange data – standardized data – across different platforms and systems that will allow them to do things more efficiently and effectively and also reduce error.

HW: What industry could present the greatest challenge or have the greatest need in 2021?

SA: Our new governance structure ultimately allows us to nimbly respond to the demands of the market. And I go back to RON as one where MISMO was well positioned to meet an emerging need quickly and effectively. And so we’re going to see what happens in the market this year from that perspective.

We want to make sure that we’re being responsive because ultimately if we’re developing standards and products that don’t meet today’s needs, or at least needs that are going to be useful in the near future, then it increases the challenge we have in getting adoption across the industry.

Folks have so much to deal with right now as far as high volume; there’s a lot going on in the marketplace, and it’s really critical that we focus on emerging needs as they come up and try to address them and provide solutions.

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