I Have Lived To See The Day

On Wednesday, April 8 I received an official invitation to attend the CFPB hosted panel discussion on looking at better ways to improve the closing process at CFPB’s HQ office in DC.  As I was sitting listening to all the government agencies sign-on in support of this initiative, I was having a sort of surreal out of body experience. It was June 28, 2002 when FannieMae published bulletin 02-08 announcing they would now begin purchasing this thing called SMART Doc eNotes. It was then that I became a bonifide convert and believer that this was going to revolutionize the way we do business and went in search of a doc company to develop and offer the solution.

What I didn’t know at that time was just how long this was going to take. During the meeting, Ann Epstein, Director of Change Management at Freddie Mac jokingly quipped, “eMortgage adoption has only been three to five years away for some time now” which was an insider joke since that line has been used and quoted so many times over the years. The real joke being we just didn’t know which three- to five-year period this actually was going to become a reality. Well, after twelve years of talking and promoting this, last Wednesday was the culmination of what I thought at times was a singular effort to evangelize and educate people on a better way to do business. I oftentimes felt like Don Quixote casting stones at windmills. As I expressed my joy to some of the other “old timers” who were in the room and drank the cool-aid early, “I’m just happy to be around to see it finally happen!”

No More Excuses

As with any new change or innovation there will always be foot draggers, naysayers and skeptics but with the new Integrated Disclosure reg effective August 1, 2015 there really is no longer a choice. I just don’t see how any lender can meet these new requirements and be in compliance of notifying and tracking acceptance by borrowers by maintaining old paper based processes and files to prove compliance.

If you look at the result of the numerous lawsuits on the servicing side culminating in the $25 Billion National Mortgage Settlement, (this was just one of many) it wasn’t just because of the infamous “robo-signing” (which eNotary would eliminate) but it highlighted the inherent problem with using paper files to document defense of replicating a transaction that occurred years before. They were missing signatures, key disclosure and note documents, sometimes they had multiple versions, incomplete or incorrect filings and the list goes on and on.

Supporting A True Electronic Process

From the ability to provide a full electronic (date & time stamp) audit trail of who, what, why and when everything occurred on the loan from application to closing and beyond, to the ability to associate and authenticate virtually ALL parties in the transaction and control who does what in the signing and review process, with “e” the entire process is more transparent, compliant and secure. The added benefit of retaining the electronic evidence for ALL parties to show “proof” of compliance is just icing on the cake.

From that day in 2002 I was bitten by the eMortgage bug and in the words of famed prophet and visionary Homer Simpson, I say to you now: “What took you so long?”

About The Author


A MISMO Milestone

*A MISMO Milestone*
**By Tony Garritano**

TonyG***PROGRESS in Lending has learned that MISMO has announced the elevation of Reference Model Versions 3.0 and 3.1 to “Recommendation” status. Recommendation status is the highest possible maturity level for a MISMO standard. The MISMO Residential Standards Governance Committee elevated Versions 3.0 and 3.1 to Recommendation status based on evidence of multiple successful industry implementations and the advice of the MISMO Architecture Workgroup.

****“The MISMO Reference Model and Logical Data Dictionary are the result of thousands of hours of effort and collaboration from volunteers across the mortgage industry,” says Harry Gardner, Chair of the Residential Standards Governance Committee and president of SigniaDocs. “We are grateful for their ongoing efforts and for the generous support of their companies as we continue to significantly expand and enhance the Reference Model in Version 3.3, to provide the mortgage industry with the framework needed to meet the fast-changing regulatory and compliance challenges we face today.”

****MISMO Version 3, first introduced in March 2009, was a significant shift forward for the MISMO standards. Development of Version 3 required that all Version 2.x standards be reconciled into a single XML Schema-based Reference Model providing common data definitions and data structures across multiple business lines. Version 3.0 was released as a Candidate Recommendation in December 2009 with emphasis on origination and loan delivery. Version 3.1 was released soon thereafter to include the remainder of the lifecycle.

****The MISMO reference models and supporting information are available at

Video Insights: ENGAGE Panelists Talk Appraisal Compliance

*ENGAGE Panelists Discuss Appraisal Compliance*

***Over 100 executives gathered to discuss the future of the mortgage space at PROGRESS in Lending’s ENGAGE Event. In particular, panelists acknowledged that new rules can be hard to follow. Certainly when we talk about appraisals, for example, new rules have been hitting frequently. Regardless, there is a way to comply. Here are some ideas from the distinguished ENGAGE panel:


Kudos For Industry Standards

*Kudos For Industry Standards*
**By Tony Garritano**

***As you all should know by now, I’m a huge supporter of MISMO. I am not allowed to directly participate, but I have in the past and will continue to do everything I can to raise awareness about the positives of embracing industry data standards through MISMO. Being data centric, ensuring data accuracy and quality is very important in our highly regulated industry. On this topic, I heard yesterday that MISMO, the not-for-profit data standards subsidiary of the Mortgage Bankers Association (MBA), released the Version 3.2 Reference Model (Candidate Recommendation) for a 30-day intellectual property rights (IPR) review. The IPR review period is the final opportunity for entities to submit any concerns over intellectual property infringement within the standard. Here’s what this means to you:

****Version 3.2 is a significant step forward in the evolution of the MISMO Reference Model and is the result of hard work and cross-collaboration among many participants in the mortgage industry. This version is a fully self-contained release of the MISMO Reference Model that includes the following new features, revisions and improvements from previous versions:

****>> Additional data elements and containers

****>> Enhanced data relationships

****>> Increased extensibility

****>> Improved attribute definition and handling

****>> Support for open content model abstraction

****Full details on the enhancements can be found in the Release Notes document included in the Version 3.2 Candidate Recommendation download from the MISMO website at:

Predictive Methods: MISMO’s Role In The Mortgage Industry

*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.

Market Analysis: We Are All Connected

*We Are All Connected*
**By Tony Garritano**

***As talk about the elections in Greece this weekend heat up I’m reminded of how connected we are. Something that happens far off in Greece could spur another world economic crisis. The mortgage process is similar. Some lenders think about it as an assembly line, but it’s not because several steps can and should be happening at the same time. Originating a mortgage is more about constructing parallel workflows instead of a traditional assembly line. In order to do that though, technology has to connect all the players. Along these lines, PROGRESS has learned that ISGN has launched new integrations to Gators, its browser-based settlement services and vendor management system that enable the system to auto-populate HUD forms, automate calls to vendors, and export title data onto customer XML fields, among other features. Here’s the details:

****Gators technology provides automated and customizable workflow management tools that allow Gators customers to streamline the settlement process. The new integrations with Medallion Analytics, Voxeo and RedVision will generate substantial time and cost savings while increasing productivity for Gators customers in appraisal, title and closing services.

****ISGN’s partnership with Medallion Analytics enables Gators customers to significantly reduce the time to create the HUD form while lowering overhead costs and improving quality. Its technology extracts and analyzes data from the lender’s closing instructions and then auto-populates the HUD form in around seven minutes. On average, it manually takes about 30 to 40 minutes to fill out the HUD form. The Medallion integration also provides a post-closing audit tool that automatically un-stacks the executed closing package and scans for any missing documents or signatures. It then restacks the executed documents according to the lender’s requirements and delivers the package electronically. This product is essential for managing the unpredictable settlement services order volume at the end of every month.

****The Voxeo integration provides automated dialing and texting services. Customers can auto-assign their appraisal and closing orders to vendors without having to confirm if vendors received and accepted the order. The Voxeo system automatically calls vendors in order of preference for specified locations. If a vendor is not available the system will automatically call the next vendor in line until the order has been successfully assigned. The texting component of the system empowers Gators customers to more easily communicate with vendors that are out in the field.

****Gators also has integrated with RedVision, a real property research solutions firm that delivers a suite of title search products and municipal tax services. RedVision uses its own proprietary software TitleVision for all of its plant-based orders within certain counties and municipalities and Gators for its non plant-based orders. With the integration, RedVision can export all of its XML fields from both TitleVision and Gators onto the XML fields of Gators customers. This integration significantly improves productivity and quality by eliminating the risk of re-keying errors.

****“The new Gators integrations provide the next generation of value added services that allow settlement companies to further automate and streamline their workflow process,” said Ankush Dham, director of technology solutions for ISGN. “For instance, if a Gators customer needs an appraisal or closing order completed right away, the new Voxeo integration will expedite the order assignment process by automatically placing a call to the vendor in a specific county to confirm order acceptance. These integrations are just a sample of the many strategic initiatives we have on our product roadmap.”

Market Analysis: Getting Ready For ULDD

*Getting Ready For ULDD*
**By Tony Garritano**

***The Uniform Loan Delivery Dataset is a major change in the way the mortgage industry not only delivers loans between lenders and investors, but is also a significant development in how loan data is verified, analyzed and evaluated. By having the individual data elements of each loan available in a standardized digital format to compare and study, investors can more easily review files to ensure greater data integrity in each loan. Analysis and reporting are greatly improved, bringing much-needed transparency and quality to the capital markets, leading to greater liquidity and reduced costs for all stakeholders in the process. Initially applying to loan deliveries involving Fannie Mae and Freddie Mac, the ULDD effectively sets the stage to become the new industry standard upon implementation. And PROGRESS in Lending has learned that one LOS is already compliant. Here’s the story:

****Mortgage Builder has already received certification from the GSEs that it is in compliance with the new Uniform Loan Delivery Dataset (ULDD) requirements, well ahead of the April voluntary loan delivery date and the July 23rd mandatory delivery deadline. The agencies pushed back the mandatory date from March to July to allow vendors and lenders more time to prepare for the change, but Mortgage Builder clients can familiarize themselves with the changes immediately.

****By being early with its readiness for the ULDD, Mortgage Builder allows its clients greater preparation time to meet the requirements of the new system and its differences. “There are many new data fields and it will take clients some time to become acclimated,” according to Liz Fafette, Mortgage Builder’s vice president of operations. “We have made every effort to make the transition as seamless as possible for users by giving them an advance view of the changes as far back as November, so that helped,” she explains. “The upload websites for Fannie and Freddie are different, but we have worked hard to make the user experience as consistent as possible with the current Mortgage Builder environment.” She notes that more than 600 data fields were involved in the conversion to ULDD, and the newest version of MISMO-standardized XML (Extensible Markup Language, standardized by the Mortgage Industry Standards and Maintenance Organization) made the effort a significant undertaking.

****“ULDD brings greater standardization to the process for each transaction,” observes Keven Smith, president and CEO of Mortgage Builder. “ULDD brings improvements to the existing methods of electronic delivery that we anticipate will reduce issues around completeness and acceptability,” he says. “There is a checking feature that warns of possible problems or conflicts with Freddie or Fannie, and prompts users to fix them before uploading. This saves the GSE and the lender time, and the overall precision of the ULDD package will help boost transparency,” Smith predicts.

****Mortgage Builder was required to demonstrate that its system’s ULDD met the requirements and quality standards for the GSEs through a series of test cases with each agency. Now, with that process complete and Mortgage Builder duly certified, the company is releasing the new version for client download and implementation. “Our technical support staff is available to assist wherever required,” says Liz Fafette, but she feels that the effort put in by her operations department will make the transition remarkably painless. “With the implementation of ULDD by Freddie Mac and Fannie Mae, the mortgage industry is officially in the digital age,” she says. “We’re glad to help in the effort to bring new levels of data integrity and transparency to the mortgage industry, and Mortgage Builder is ready to go – months ahead of the deadline.”

Technology Spotlight: Sifting Through New Appraisal Rules

*Sifting Through New Appraisal Rules*
**Clarity Appraisal Management Company Profiled**

***Tired of all the appraisal changes? No worries, that’s where technology comes in. For example, ValuLink, a provider of appraisal management software solutions for banks, lenders and appraisal management companies (AMCs), was selected by Clarity Appraisal Management Company to be its appraisal management software platform. Clarity AMC is a Nashville, TN-based AMC doing business in 29 states.

****“We chose ValuLink for its ability to change the way we do business through its automation,” said Jason Bennett, co-owner of Clarity Appraisal Management. “The software platform has already made us much more productive, letting us do more business with the same amount of employees. Now if we grow by 5,000 additional orders, we will not have to add another person. We expect that kind of growth at our company this year.”

****Clarity AMC required a customized software platform built for its own business processes to automate all of its manual tasks. This will allow Clarity AMC to expand its appraisal ordering client base without adding additional employees and expenses.

****“ValuLink is a true business partner,” Bennett added. “They came in to our offices and we explained what features we needed and they put it together for us. The system through automation does all the things we used to do manually. ValuLink’s customer service is second to none, too. They followed up quickly and thoroughly to every inquiry we made.”

****ValuLink delivers a fully functional portal to a new client on the first day of doing business, which enabled Clarity to speed up its migration process to the new platform. The software platform is integrated with major loan origination systems, allowing lenders and banks to seamlessly and quickly order appraisals as mortgages are originated. ValuLink’s appraisal management platform includes intuitive features for vendor enrollment, appraisal order placement and storage, no set-up costs, and full accounting features. The platform includes a UAD Preview engine for client compliance with Fannie Mae and Freddie Mac’s new appraisal dataset and full Uniform Collateral Data Profile (UCDP) connectivity.

****The ValuLink platform makes it easy for Clarity’s clients to place orders and access appraisal reports, logging in only once to enter the system instead of three or four times under Clarity’s old appraisal management software. Plus, ValuLink equips Clarity AMC with a mobile smart phone application that lets appraisers accept or decline an order while in the field. Today when every minute counts in the industry, the mobile app increases productivity and speeds up the appraisal process from start to finish.

****Scott Schneider, executive vice president of ValuLink, said, “Clarity AMC relies on accurate, compliant, and timely reports to keep their crucial high growth clients happy. As AMCs expand into more states and state registration fees take a larger bite out of profits, they need next generation technology that increases efficiency and accuracy while simultaneously helping them maintain profitability. The ValuLink platform is helping Clarity AMC better serve its existing clients and grow its business by simplifying process management with a design that is easy to use for the AMC, their customers and appraisers.”