MISMO Proposes More Efficient Reference Model

The Mortgage Industry Standards Maintenance Organization this week proposed version 3.6 of its reference model, which includes large and small updates to the data collected by lenders and servicers.

Seth Appleton, president of MISMO, termed the reference model as the “overall foundation” of how MISMO data standards get exchanged in the market, and said the updates would shape “every new [application programming interface], dataset and SMART Doc in the coming years.”

He said receiving stakeholder feedback on the new model was an extremely important step in ensuring its efficacy. Comments on the proposal are due Dec. 16.

The new version will support the government-sponsored enterprises’ updated residential appraisal data exchange, the Uniform Appraisal Dataset.

“The UAD and Forms Redesign Initiative is a massive effort underway by the GSEs to, among other things, move away from free form text and instead use standardized data for the exchange of appraisal information,” Appleton noted.

That work required several new data elements and alterations to other elements in the MISMO model, he said.

The new model also standardizes the data fields collected from a borrower’s loan application that are used by participants in the non-agency mortgage-backed security market. Currently, industry participants have to submit custom supplemental data elements to support the rating and review of those transactions, Appleton said.

The model also updates the Verifiable Profile SMART Doc standard to make it easier to verify loan-related documents’ information is accurate and tamper-free.

“How often have we heard about checkers checking with checkers, and all of the time that goes into verifying, rekeying and reconciling data and documents?” Appleton asked rhetorically.

The changes will also facilitate the exchange of closing instructions, which Appleton said had been a significant cause of friction between lenders and title and settlement partners, and other communications to cut down on delays in closing.

Some MISMO community-built templates, he said, were made to address the problem but required users to build extensions to use those templates.

“There’s a lot of standards in here that have been published previously but you would have had to build an extension to adopt it more easily. Now they’re in the base reference model,” he said.

Another significant change is a revamp of MISMO’s API toolkit. One tool, offered as an example of the lightweight apps that stakeholders can build using the new model’s offerings, will now return loan limits based on the ZIP code of a subject property’s address.

Some smaller-scale changes will likely help, too. Commonly used forms like VA Form 1880, Adverse Action and IRS Forms 4506T and 4506C will have document data mappings, cutting down further on procedural delays, and innumerable maintenance changes to clean up the data points in the model.

The Mortgage Bankers Association, which owns MISMO, said the new reference model will make it easier for companies to communicate with business partners regardless of the technologies they use, due to an XML schema representation of the data and relationships that support business processes, and will include a logical data dictionary which provides a business-centric view of the model.