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 developed 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 has a long history of providing value to the entire mortgage finance ecosystem, including lenders. Founded in 1999, its relevance and impact on the mortgage market have been notable. Essentially 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.
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.
With recent investments from MBA, MISMO has been able to provide tangible lender benefits. These include:
- Remote Online Notarization (RON) standards that have enabled organizations to continue to close loans during the COVID pandemic;
- eMortgage Technology Certifications (RON and eClosing) to assist lenders with identification of product vendors that meet MISMO standards;
- A digital mortgage resource center to assist organizations with the transition to digital loan processes;
- Model Taxpayer Consent Language to assist lenders with compliance with a recently enacted law;
- Standardized Closing Instructions templates to enable lenders to communicate more effectively with settlement agents;
- Industry Loan Application Dataset (iLAD) provides a standard way of exchanging information included in the new Uniform Residential Loan Application (URLA) as well as the GSE automated underwriting systems;
- Standardized terms/definitions that enable consistency in the exchange of information with the GSE UMDP, FHA, VA, Ginnie Mae, and CFPB HMDA requirements;
What is MISMO doing to support the industry during the COVID-19 pandemic and post pandemic?
The reliance on digitizing the mortgage process has never been more apparent as millions of homeowners are facing financial hardships. MISMO is leading the industry to digitize the loan modification process, with the goals of handling the increased volume and improving the experience for servicers and borrowers. Further, rapid adoption of Remote Online Notarization standards, digital closings, and electronic notes are examples of the effectiveness of MISMO and the importance of its initiatives in the current environment.
The industry needs MISMO to develop solutions and standards much more rapidly. What needs to happen to ensure that MISMO continues to meet the future needs of the industry and to expedite its development process?
As MISMO continues to mature, updates are being made to the governance of the organization. The size of the board of directors has been increased, with board seats allocated to ensure the entire industry is represented. The board now has several new committees to oversee various aspects of the organization, including finance and prioritization committees. Additional changes to assist MISMO with its growth include appointment of a full time President and additional full-time staff to facilitate the rapid development of priorities.
MISMO's funding model was enhanced to ensure that the organization can continue to meet the future needs of the industry. The MISMO and MBA boards of directors approved a $0.75 fee for all new loans. The ICE Mortgage Services Board of Directors recognizes the importance of MISMO to the future of the mortgage industry's digital mortgage evolution, and approved MERSCORP's role in supporting MISMO's funding model. This fee goes toward enhancing and accelerating the work MISMO provides to the entire real estate ecosystem. As is evident during the pandemic, the need to continue to evolve with the digital mortgage is paramount and will continue to be a primary focus for the organization.
What is the purpose of MISMO Innovation Investment Fee?
The MISMO innovation investment fee, along with recently increased MISMO membership and Champions program fees, provides sustainable funding, to enable MISMO to enhance staff resources to accelerate work on industry initiatives and standards development. The development of MISMO standards is almost wholly reliant upon volunteers. The addition of professional resources is enabling industry participants to focus on providing their expertise in relevant areas rather than performing administrative functions on behalf of MISMO.
How will industry benefit from collectively paying the MISMO Innovation Investment Fee?
The MISMO innovation investment fee enables MISMO to speed the development of 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. As is evident during the pandemic, the need to continue to evolve with the digital mortgage is paramount and will continue to be a primary focus for the organization.
How will my organization 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.
Organizations that pay the innovation investment fee will receive a license to use and implement MISMO standards for non-commercial purposes. This includes license to use standards such as the recently released Industry Loan Application Dataset (iLAD); Standardized Closing Instruction templates; Remote Online Notarization (RON) standards; SMART Doc® standards; and the technology agnostic Logical Data Model.
Non-commercial purposes include activities such as enhancing internal systems or supporting exchanges of information with business partners. It does not include enhancing systems or products that are made commercially available for sale. Licenses will remain valid through the end of the calendar year in which the innovation investment fee is paid.
How much is the MISMO Innovation Investment Fee?
The MISMO and MBA boards of directors recently approved a funding model to request MERSCORP to invoice MERS® System Members on behalf of MISMO a $0.75 MISMO innovation investment fee for every new loan. The lender's obligation based upon this fee will be calculated once a year, based on prior year MERS® System registration volumes with billings expected to be issued each year in the January/February timeframe.
MERSCORP is acting only as a billing agent for MISMO. No innovation investment fees will be retained by MERSCORP for the performance of this role. MERSCORP is performing this function as a service to MISMO and the industry.
How and when will the fee be charged?
Invoices are distributed annually in February. The fee is calculated as $.75 per MERS® System registration based on prior year MERS® System registration volumes. For example, an organization that originates 1,000 loans will receive a bill for $750 (calculated as $0.75 times 1,000 loans registered on the MERS® System).
Learn More About the Innovation Investment Fee