*MISMO’s Role in the Mortgage Industry*
**By William E. King**
***The Mortgage Industry Standards Maintenance Organization (MISMO) has had a significant impact on the way data is stored and shared since the collapse of the housing market in 2008. MISMO is transparent by design, uses a single business vocabulary and is available across the entire mortgage finance industry. Adoption of MISMO standards represent the most significant opportunity for professionals to meet industry demands for increased transparency, access to complete data sets and more supported analysis across the rapidly evolving mortgage finance landscape.
****In 1999, MISMO was formed as an independent affiliate of the Mortgage Bankers Association with a goal to “coordinate the development and maintenance of internet-based Extensible Markup Language (XML) real estate finance specifications.” Incorporated as a 501(c)6 not-for-profit corporation staffed with volunteer participants, MISMO seeks to provide a common vocabulary and definitions in the exchange of data in the mortgage industry to enable clear and consistent communications among professionals.
****The guidelines that MISMO’s chief architect Greg Alvord leaned on the most during its creation, and still today, is a focus on eliminating redundancy and multiple meanings. At Veros’ 2012 Predictive Methods Conference this past June, Alvord highlighted his mantra, the four points outlined below, as the essence of what MISMO does in allowing for the flow and communication of standardized mortgage data:
>> Things with the same name are the same.
****>> Things with different names are different.
****>> Be conservative in what you send and liberal in what you accept.
****>> Send what you have, I will take what I need.
****Historically, mortgage information has been provided in Word or PDF documents, making the data difficult to extract, transfer or analyze. Electronic data standards should be software-agnostic allowing different systems to “talk” to each other in a common language. In this format, data can be integrated into a wide variety of internal systems for analysis and retrieval. Many proprietary languages have been developed, but typically require purchase and maintenance of specific software and hardware. This is not inherently bad, but it adds a layer of complexity. For example, there are many types of word processing programs available in the market, but in most cases, if your computer doesn’t have the same software or the same version, users won’t be able to interact with each other.
****MISMO creates effective data standardization and communication tools in the mortgage industry by promoting transparency, accuracy and efficiency. Just as the mortgage industry continues to evolve and move toward greater sustainability, MISMO continues to change to accommodate new industry regulations and continues to play a critical role in the success of industry-wide initiatives like the Uniform Mortgage Data Program.
****The MISMO platform is experiencing a series of upgrades that are being utilized by industry participants in their systems. In my next column I will explore why more organizations in the industry need to start implementing the upgraded MISMO platform, and provide guidance on best practices for adopting the latest version.
William E. King is the director of valuation services at Veros Real Estate Solutions (Veros), headquartered in Santa Ana, Calif. His responsibilities include managing automated quality controls, overseeing appraisal rules and scoring modules, as well as actively monitoring the enhancement of Veros’ proprietary valuation models and risk analytics. In his previous role, King served as owner and chief appraiser of ValueOne Appraisal. He holds both a certified residential appraisal license and a real estate broker’s license. King is a nationally recognized instructor of real estate and appraisal courses, including USPAP. Additionally, he is an active speaker at numerous real estate industry conferences and events.