*The Robustness Principal*
**By Elizabeth Green**
***We’ve been reading a lot about MISMO lately which is fantastic! Many of you know who MISMO is and some of you know what MISMO is, but, misconceptions in the industry persist. For instance, many people think that because UAD and ULDD are a part of the UMDP and both use MISMO that they are the same. They are not, but they are in the same family. What’s the difference? The chart below highlights a few key features in the progress of the evolution of MISMO:
****The key change in philosophy in MISMO 3 versus the previous generation 2 is that the former is a collection of standalone data formats defined for very specific purposes. I like to describe the MISMO version 3 series as the all-encompassing mortgage dictionary. Any number of new and existing business requirements for exchanging data can be supported.
****All data is not equal in in terms of depth, accuracy, freshness, reliability and accessibility. And of course, it is always subject to interpretation. To comprehend the meaning of data and to harness the power of information, we need a common vocabulary. This is where MISMO comes in. Think of MISMO 3.2 as a central reference from which information exchange messages as well as new valuation services and products can be derived from. The process can be liberated from legacy methods that rely on proprietary formats and limited datasets.
****MISMO 3.2 reconciles all the original MISMO version 2 individual formats (flood, title, loan application, aus, etc.) into a single, holistic reference model as well as expands the full dataset to accommodate various new regulatory requirements such as SAFE Act, the new GFEs and hundreds of new and improved data points. And, while the version 2 formats remain available for use, they are no longer actively maintained by MISMO. But, if you need to exchange data in a particular format, say, for UCDP submission, the message can be produced from the larger, MISMO 3.2 reference model. It is not an either/or proposition, although this fact is not well understood in the industry.
****By way of background, the UAD provides specific data requirements for the GSE appraisal forms and requires the data to be provided in a proprietary format which was premised on MISMO Valuation Response 2.6. The format used for UAD, 2.6GSE, is only available from Fannie Mae and Freddie Mac.
****The phrase “be conservative in what you send and liberal in what you accept” is known as the Robustness Principal or Postel’s law. In other words, code that sends commands or data to other machines (or to other programs on the same machine) should conform completely to the specifications, but code that receives input should accept non-conformant input as long as the meaning is clear. MISMO version 3 series provides that clarity through a single data definition source.
****The MISMO v3.2 Reference Model is a significant next step forward in the evolution of the MISMO Reference Model. It represents all of the information introduced in versions 3.0 and 3.1 along with improved features and hundreds of new definitions.
****Data has always been the foundational element of mortgage origination, settlement and servicing processes. Technology has made access easy and sources plentiful. The post-crisis mortgage industry is faced with expanding regulatory requirements and a broad call for transparency. To meet these challenges, we must be able to continually apply better detailed information and credible data sourcing an ongoing and increasing basis. When industry participants embrace the concept of using a data reference such as MISMO 3.2 as a means of providing a common source for data translation and business definitions, they can escape the limitations on data boundaries often imposed by legacy systems.
Elizabeth Green, Principal Consultant, rel-e-vant Solutions, is a strategist, solutions architect, speaker and valuation advocate. A recognized mortgage technology veteran in software product leadership for solutions in residential property valuation, loan origination, mortgage servicing and secondary marketing, Green is helping to foster a new level of understanding in property valuation and collateral risk assessment through the application of digital intelligence. She is the third term chairperson of the MISMO Property & Valuation Services Workgroup. Liz can be reached at Liz@relevant.com , follow her on Twitter @FreshRelevance.