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Opinion

[PULSE] Digitizing the mortgage industry through MISMO

MBA's Robert Broeksmit on recent MISMO changes

Over the last several years, the Mortgage Industry Standards Maintenance Organization (MISMO) has been the driving force as the mortgage industry has transitioned to a digital world.

MISMO was created to standardize how the mortgage industry communicates, and its mission has been to drive standardized data and information through industrywide collaboration.

This, in turn, ensures efficiency, consistency, cost savings, and consumer benefits through all aspects of the mortgage process.

MISMO’s success up to this point has been notable, and thanks to investments by key stakeholders, it has created tangible benefits for both lenders and consumers, including:

  • Remote Online Notarization (RON) standards;
  • A RON Product Certification to assist lenders in identifying product vendors that meet MISMO standards;
  • A digital mortgage resource center to assist organizations with the transition to digital loan processes; 
  • Standardized Closing Instructions templates to enable lenders to communicate more effectively with settlement agents; 
  • The creation of an Industry Loan Application Dataset (iLAD), which provides a standard way of exchanging information included in the new Uniform Residential Loan Application (URLA) as well as the GSE automated underwriting systems; and 
  • The creation of standardized terms and definitions that enable consistency in the exchange of information with the GSE Uniform Mortgage Data Program, FHA, VA, Ginnie Mae and CFPB HMDA requirements.

Beyond these accomplishments, MISMO has played an important role during the critical times we face today. In fact, during the COVID-19 pandemic, MISMO’s purpose and execution have never been more evident. The rapid expansion of RON standards, digital closings, and electronic notes have all helped not only the industry but, more importantly, consumers as mortgage closings have continued during this difficult time. 

Robert Broeksmit
Guest Author

MISMO’s continued growth will be even more important in the future. That is why MISMO, with the broad support of MBA’s membership and MER Boards of Directors, will begin collecting a $0.75 administrative fee for every new loan registered on the MERS system. The new fee will allow MISMO to significantly enhance the valuable products and services it provides to the entire real estate ecosystem. 

The establishment of a dedicated source of funding will allow MISMO to speed up the development and adoption of new standards that will benefit lenders of all sizes and business models by reducing friction and improving the integration and flow of data across the entire industry. This will undoubtedly create a better digital mortgage experience for consumers and all parties involved in a real estate transaction.

MISMO has a bevy of initiatives and projects it plans to undertake, including a fully digitized loan file with standard elements, standardized industry definitions to promote document clarity and certainty, common closing datasets to create uniformity, and standardized servicing files to ensure compliance and ease servicing transfers. 

The COVID-19 pandemic has reinforced the importance of digitization in all aspects of our lives. And as we move into the future, it is incumbent on our industry to further embrace this digitization and grow beyond its current framework. MISMO will be at the forefront of this growth by ensuring that the industry effectively communicates across a wide variety of stakeholders as products and technologies evolve. 

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