What is MISMO?
MISMO® is the standards development body for the mortgage industry. Through broad industry collaboration, MISMO creates standards that support solutions to the industry's toughest operational, technology and implementation issues. MISMO serves as a platform for the industry to coalesce around impactful industry issues and work to address them collaboratively. MISMO developed and maintains a common language for exchanging information for the mortgage finance industry. MISMO standards are accepted and deployed by every type of entity involved in creating mortgages, and they are required by most regulators, housing agencies and the GSEs that participate in the industry.
Use of MISMO standards has been found to lower per loan costs, improve margins, reduce errors, and speed up the loan process by reducing manual, paper-based processes while creating cost savings for the consumer.
MISMO standards are grounded in an open process to develop, promote and maintain voluntary consensus-based standards that allow participants in the mortgage industry such as mortgage lenders, investors in real estate and mortgages, servicers, industry vendors, borrowers and other parties to exchange information more securely, efficiently and economically.
MISMO is a subsidiary of the Mortgage Bankers Association.
How does the mortgage finance industry, and especially lenders, benefit from MISMO?
MISMO provides tremendous value to the entire mortgage finance industry by enhancing the interoperability of systems, improving efficiency, reducing costs, and accelerating the ongoing digital transformation of our industry.
Nearly every residential loan manufactured today uses MISMO standards. Many industry information exchanges are based on MISMO standards including all exchanges included in the GSE UMDP program as well as exchanges required by FHA, Ginnie Mae, VA and the USDA. MISMO collaborative efforts significantly contributed to the industry evolution from paper-based processes to digital including areas such as eSignatures, eRecordings, and eNotes. Every eNote is a MISMO SMART Doc®. Over 2 million eNotes have been registered with MERS.
MISMO is committed to leading efforts in creating a better digital mortgage experience for all parties involved in a real estate transaction. MISMO will continue to help organizations communicate more efficiently, as new technologies are introduced and evolve.
MISMO solutions lead to lower costs throughout the mortgage process; reduced friction as information is shared effectively between the various parties in the mortgage transaction; faster, more efficient loan closings; enhanced innovation across the industry; improved regulatory and counterparty compliance; and reduced levels of fraud.
What is MISMO’s Innovation Investment Fee?
MISMO launched the Innovation Investment Fee program in 2021 to allow lenders to support the important work necessary to foster efficiency, cost reduction, interoperability, digital transformation, and innovation in the mortgage process. To date, more than 3,000 lenders of all sizes and business models have invested in the future of our industry by paying their Innovation Investment Fee (IIF).
Your organization’s investment makes it possible for MISMO to build the communication standard’s groundwork for a more efficient, less costly mortgage market.
The Innovation Investment Fee of just $0.75 per origination is the primary funding model endorsed by the MBA and MISMO boards of directors to accelerate the development and adoption of crucial industry standards and best practices.
The annual Innovation Investment Fee invoice is calculated based on an organization’s prior year MERS® System loan registrations with billing expected in early February. For example, an organization that registers 1,000 loans on the MERS® System in 2024 will receive a bill in February 2025 for $750 ($0.75 times 1,000). Payment of the Innovation Investment Fee is voluntary, but these funds are essential support for MISMO’s important work. Non-payment of the Innovation Investment Fee will have no impact on an organization’s MERS® System Membership but will impact the scope of MISMO programs and projects.
How does industry benefit from collectively paying the MISMO Innovation Investment Fee?
The MISMO Innovation Investment Fee enables MISMO to develop industrywide standards, benefiting lenders of all sizes and business models by reducing friction and improving the integration and flow of data across the entire industry. The need to continue to support the growth of digital mortgage is paramount and will continue to be a primary focus for the organization.
In the challenging economic environment that so many in our business are grappling with, MISMO’s cost-saving efficiencies and solutions are more important than ever. Notably, last year MISMO released a number of new and updated standards, including an update to the reference model, the foundation of MISMO dataset, API, and SMART Doc® standards, and a Private Label RMBS Specification and Implementation Guide that will support the rating agencies and result in a more efficient Private Label RMBS securitization process. Responding to industry needs, we published an ESG Data Implementation Considerations reference guide to assist lenders and other industry participants in gathering environmental, social, and governance (ESG) information to meet reporting requirements and made important progress towards publishing a standardized regulatory examination file for lender submission to state regulators. At the same time, MISMO provided an industry forum for discussion of the impact of FHFA credit scoring changes, the emerging use of artificial intelligence (AI), and the creation of a playbook of servicing transfers best practices.
In 2024, the industry can expect significant progress on several MISMO initiatives, including the growth of our new MISMO Certification offering, which will give users the assurance that their products and services are meeting our published set of standards.
How will lender organizations benefit from paying the MISMO Innovation Investment Fee?
This fee benefits lenders of all sizes and business models by accelerating the development of industrywide standards thus increasing innovation; reducing friction; and improving the integration and flow of data across the entire industry. MISMO published numerous standards and resources in the past year, and MISMO continues to make significant progress on many other high priority initiatives, including:
- MISMO expanded its certification offerings into suite of business and technology certifications, allowing providers an opportunity to highlight their adherence to MISMO standards. MISMO certifications save lenders time and resources by providing a consistent assessment of technology provider capabilities, including information on which technology providers comply with applicable MISMO standards/certification requirements, enhancing transparency and interoperability, thereby reducing the potential for rework.
- We published the MISMO’s Servicing Transfers Catalog in 2023, a playbook of best practices supporting the timely and accurate transfer of residential loan information, facilitating uninterrupted loan servicing, and reducing potential negative effects to both the borrower and the new transferee servicer and are now developing servicing transfers data standards.
- Two new initiatives that are moving forward have the potential to ease significant friction for lenders.
- The first will standardize the Regulatory Loan Examination File submitted by lenders to state regulators.
- The second will build a standardized Housing Counseling dataset for housing counseling agencies to exchange information with their lender partners, improving connectivity in this vital relationship.
- Title Docs to Data Work: MISMO is working to map all pre-close, close, and post-close title and closing forms to the MISMO Reference Model creating new standard datasets for the efficient exchange of title and closing data.
- Department of Veterans Affairs (VA) Takes on the MISMO Model: MISMO recently launched a collaboration with the VA to create standard datasets for each VA form, similar to the Title Docs to Data work, enabling more efficient exchange of data associated with VA forms.
Further, Lenders that support MISMO with an Innovation Investment Fee (IIF) payment of $1,000 or more will receive MISMO membership and all associated benefits, including access to MISMO standards; discounts for events and education; access to works in progress in our member-only portal; access to the e-Eligibility Exchange, powered by Snapdocs; and a complimentary registration to MISMO Boot Camp. Lenders who pay an amount to qualify for Champion enrollment receive additional recognition and benefits commensurate with the support they provide through the fee.