MISMO Announces Call for Participants to Join New eHELOC Development Workgroup

WASHINGTON, D.C. (April 13, 2023) – MISMO®, the real estate finance industry's standards organization, today issued a call for participants to join a new development workgroup (DWG) focused on creating standards for Electronic Home Equity Lines of Credit (eHELOC).

A number of factors have driven interest in creating standards for electronic closing documents for the HELOC process, including:

• High home equity for most homeowners has resulted in an increased interest in HELOCs by consumers over the past several years. As the Federal Reserve continues its plans to slow inflation, rates are expected to remain high. The DWG will consider these economic conditions in the development of the product.

• Given that HELOC organizations are more streamlined than closed-end lending, there is a greater importance for adoption of electronic closing documents.

• Unlike closed-end eNotes, which have limitations on the substance of the note, eHELOCs are not "negotiable instruments," so they contain more, and greater variation of, substantive terms. Standardizing these electronic closing documents would allow for increased interoperability of HELOCs –  easing the onboarding process as the assets are sold/transferred between parties.

• The terms of the eHELOC credit agreement and the open-end security instrument vary from the standardized closed-end note and mortgage – as there's no primary investor/liquidity provider with broadly used form model documents, allowing this MISMO workgroup the ability to step in to innovate and standardize. 

“Industry professionals who have an interest in – or experience with – developing electronic document standards are encouraged to join,” said David Coleman, President of MISMO. “The new eHELOC DWG will collaborate with industry participants, government agencies, and other stakeholders to complete the analysis to determine eHELOC standard feasibility and prepare a roadmap of artifacts that would be needed to standardize this across the Digital Mortgage ecosystem.”

Industry support is necessary to ensure that all relevant needs are considered and to confirm that key activities are identified, addressed, and incorporated into the eHELOC Roadmap. Meetings will be conducted regularly via conference call.

Individuals interested in this group who are already MISMO Members may join the collaboration site that has been established on MISMO connect. Those not already members or MISMO who would like to participate should contact MISMO.org.

MISMO’s work to solve key business challenges is made possible due to lender support of the MISMO Innovation Investment Fee. For information on MISMO and how to join visit MISMO.org.