Susan Graham is president and chief operating officer of
Financial Industry Computer Systems Inc. (FICS), which provides cost-effective servicing and mortgage origination
soft ware utilizing the MISMO standards for its seamless origination interfaces to provide customers a choice in service
providers. As president and COO, Graham is responsible for
the overall management of the company’s day-to-day operations, strategic planning, customer relations and product
development. For more information, visit fics.com. Reach
Graham at email@example.com.
Lock in the MISMO Advantage
Standardizing data increases business opportunities
By Susan Graham
Author Sir Arthur Conan Doyle’s famous fictional detective, Sherlock Holmes, refused to form any theories or draw any conclusions about a case until he had
sufficient data. Without the data, anything Holmes
postulated would just be a guess — a dangerous move
when trying to stop master criminals.
Likewise, for mortgage originators, data is the basic
building block of everything. The borrower, credit,
underwriting and investor data all come together
to build a profitable loan that will perform over the
course of its life.
While collecting and using this data, mortgage
companies rely on a variety of software platforms to
automate the different steps of the mortgage process.
Most mortgage originators use a combination of tools,
including loan origination systems (LOS), document
software, loan-application portals, settlement-services
software, credit reporting, flood determinations, mortgage insurance, compliance aids and loan-delivery
Loan data must flow easily between these systems
in a secure manner that protects data integrity. All too
often, however, vendors build proprietary data tools
that make it difficult for multiple systems to work
together seamlessly. By adopting industrywide data
standards, however, vendors make it possible for the
mortgage originator’s LOS and technology partners to
interface without a hitch.
Speaking the same language
The primary data-standard guardian in the mortgage
industry is the Mortgage Industry Standards Maintenance Organization (MISMO). Established in 1999,
MISMO began the process of establishing industrywide standards in response to the rapid growth of
computerized LOS and underwriting engines.
Each year, MISMO evaluates the data needs of lenders and makes proposals and suggestions for new
standards. The most recent update, MISMO 3. 4, laid
the groundwork for many of the major regulatory
changes coming in 2017 and 2018.
These changes include the Consumer Financial
Protection Bureau and Home Mortgage Disclosure Act
reforms of 2018 as well as Fannie Mae and Freddie Mac’s
Uniform Loan Application Dataset and Uniform Closing
Dataset, which begin later this year. Adhering to the
latest MISMO standards ensures that the entire mortgage industry is “speaking the same data language.”
The primary benefit of using a data standard like
MISMO is that it provides a consistent experience across
all areas of the mortgage process. By using an industrywide data standard, loan originators and vendors
alike eliminate the need for proprietary integrations
and custom programming between partners.
In the simplest terms, MISMO standards enable
technology vendors to build interfaces that share
code between every type of entity involved in creating mortgages. The widespread adoption of MISMO
standards by regulators and government-sponsored
enterprises facilitates quick and accurate communication — essential for secondary marketing and
meeting compliance standards.
Mortgage companies have the freedom to choose
compatible service providers that adopt MISMO
standards and best meet their individual needs. When
systems use proprietary interfaces, originators are
usually limited to only working with a small selection
of vendors that have an existing working relationship with their company’s LOS.
Increased compatibility helps drive innovation. When
lenders have the opportunity to select from a much
larger pool of technology partners, vendors must
deliver innovative products to stay competitive.
MISMO data standards also help mortgage companies avoid getting locked into relationships that
don’t foster consistent success. Companies using software adhering to the MISMO data standards have the
flexibility to change vendors for the various services
they use throughout their lending processes. This
allows originators to provide their borrowers with the
greatest efficiencies and best experience for what is
certainly the largest transaction a consumer encounters — a home purchase.
One of the most important integrations a mortgage
company must consider is between its LOS and its
document-services provider. Once the loan appli-
cation is in the LOS, that platform serves as the
database of record and provides the engine for
underwriting, pricing, closing and secondary market-
ing. The document-services provider must be able
to read that data to produce required loan documents
throughout the loan-application process.
This is in addition to any other services that vendor
may provide, such as electronic-document delivery
and signatures. When it comes time to close, MISMO
standards facilitate the reconciliation of certain
data from the LOS and settlement services to meet
The ease of sharing information is evident in those
companies that build interfaces that specifically
leverage the benefits of MISMO. A mortgage company’s LOS with a document-services interface, for
example, can use MISMO standards to seamlessly
transfer loan data, allowing any vendor adhering to
this format to interface directly to provide services to
the LOS’ users.
Although each document-service provider has its
own system for capturing data elements and producing documents, adherence to MISMO standards makes it simple to ensure that no data gets
lost between systems. This holds true for any entity
a mortgage company may use for a particular
n n n
In the end, originators know that the mortgage
industry is constantly changing. New regulatory
requirements, investor demands and new technologies for working with borrowers crop up every year.
Therefore, mortgage companies need to remain
flexible enough to select the tools that help them
be as efficient and effective as possible.
By partnering with technology providers that adopt
MISMO standards, mortgage companies can utilize
the technology environment that helps them remain
compliant and profitable while delivering high-quality
service to their borrowers. n
to remain flexible
enough to select
the tools that help
them be as efficient
and effective as