MISMO

Last updated

The Mortgage Industry Standards Maintenance Organization(MISMO) is a not-for-profit, wholly owned subsidiary of the Mortgage Bankers Association (MBA) responsible for developing standards for exchanging information and conducting business in the U.S. mortgage finance industry. [1] [2] It has more than 175 member organizations representing a cross-section of the residential and commercial mortgage industries. [3]

Contents

MISMO standards are accepted and deployed by almost every entity involved in creating or regulating mortgages in the United States, including banks, credit unions, mortgage lenders, Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing Administration and the Consumer Financial Protection Bureau, in addition to settlement services providers, real estate appraisers and other third parties. [4] [5] [6]

Use of MISMO standards has been found to lower per-loan costs, improve profit margins, reduce errors and speed up the loan process by reducing manual, paper-based processes and creating cost savings for consumers. [7] [8]

Background

Mission

MISMO states its mission is “to drive standardized data and information and improved business practices between all mortgage stakeholders through collaborative and innovative initiatives that improve efficiency, reduce costs and facilitate stakeholder success.” The organization says it is committed to fostering an open process to develop, promote and maintain industry standards. [9]

Membership

Membership in MISMO is open to any organization involved in the mortgage industry, including mortgage lenders, banks, credit unions, mortgage servicers, third-party vendors and individuals. Membership includes an End-User License and/or a Distributor License for use of MISMO standards, access to MISMO standards, and access to MISMO Connect, the organization's members-only online collaboration tool. [10]

In 2017, MISMO changed from a tiered membership structure to single type of membership and rate for all corporate members but kept its existing individual contributor membership. [11]

Leadership

MISMO is led by a board of directors that oversees MISMO's administration and policy developments. The board is advised by residential and commercial standards governance committees as well as strategic planning, education, and membership and revenue committees. Committee members are elected from a cross section of MISMO members. [12]

Standards Development

MISMO standards are established through a voluntary, collaborative process. Subject matter experts from all sectors of the mortgage finance industry are invited to participate in the process, but only MISMO members may vote on proposed standards. [13]

Standards are created through individual workgroups and "communities of practice." As of August 2018, MISMO has a total of 21 workgroups and communities of practice. Topics range from blockchain technology, eNote validation rules, eMortgages, closing instructions and others. MISMO members can request the creation of a new workgroup or community of practice, which need to be approved by MISMO's governing board. [14] [15] [16] [17]

In addition to standards and specifications, MISMO develops implementation guides and toolkits to help other organizations adopt standards and to solve their various business issues. [18] MISMO has also published a Business Glossary, an online resource of common mortgage industry business terms and data point descriptions that are used with MISMO standards. [19]

Other Activities

Education

MISMO provides courses and webinars to help lenders adopt technology and prepare for future technology advancements impacting the mortgage industry. Topics include eMortgages, "MISMO Fundamentals" and the Home Mortgage Disclosure Act (HMDA). [20]

Certifications

MISMO offers several certification programs for organizations and professionals.

The Certified MISMO Standards Professional (CMSP) is a point-based certification program for professionals who demonstrate advanced knowledge of MISMO standards and best practices. [21]

The MISMO Software Compliance Certification is designed for technology companies that can demonstrate their products comply with MISMO standards. There are two certification levels, "Standard" and "Premier." MISMO also offers a TILA RESPA Integrated Disclosures (TRID) Certification program for companies that use MISMO standards and best practices appropriately on mortgage loan disclosures that lenders must give borrowers. [22]

MISMO has affiliations with The Appraisal Institute, [23] The Property Records Industry Association, the American Land Title Association, CRE Finance Council [24] and a number of other entities to build standards for both residential and commercial property transactions.[ citation needed ]

Parent

MISMO is a wholly owned subsidiary of the Mortgage Bankers Association. [25]

See also

Related Research Articles

<span class="mw-page-title-main">Federal Housing Administration</span> U.S. government agency responsible for mortgage insurance

The Federal Housing Administration (FHA), also known as the Office of Housing within the Department of Housing and Urban Development (HUD), is a United States government agency founded by President Franklin Delano Roosevelt, established in part by the National Housing Act of 1934. Its primary function is to provide insurance for mortgages originated by private lenders for various types of properties, including single-family homes, multifamily rental properties, hospitals, and residential care facilities. FHA mortgage insurance serves to safeguard these private lenders from financial losses. In the event that a property owner defaults on their mortgage, FHA steps in to compensate the lender for the outstanding principal balance.

<span class="mw-page-title-main">Redlining</span> Systemic denial of services to some areas

Redlining is a discriminatory practice in which services are withheld from potential customers who reside in neighborhoods classified as "hazardous" to investment; these neighborhoods have significant numbers of racial and ethnic minorities, and low-income residents. While the best-known examples involve denial of credit and insurance, also sometimes attributed to redlining in many instances are denial of healthcare and the development of food deserts in minority neighborhoods. In the case of retail businesses like supermarkets, the purposeful construction of stores impractically far away from targeted residents results in a redlining effect.

<span class="mw-page-title-main">United States Department of Housing and Urban Development</span> Cabinet-level federal government department

The United States Department of Housing and Urban Development (HUD) is one of the executive departments of the U.S. federal government. It administers federal housing and urban development laws. It is headed by the Secretary of Housing and Urban Development, who reports directly to the President of the United States and is a member of the president's Cabinet.

<span class="mw-page-title-main">Government National Mortgage Association</span> Government-owned financial services corporation aimed at low-income housing in the US

The Government National Mortgage Association (GNMA), or Ginnie Mae, is a government-owned corporation of the United States Federal Government within the Department of Housing and Urban Development (HUD). It was founded in 1968 and works to expand affordable housing by guaranteeing housing loans (mortgages) thereby lowering financing costs such as interest rates for those loans. It does that through guaranteeing to investors the on-time payment of mortgage-backed securities (MBS) even if homeowners default on the underlying mortgages and the homes are foreclosed upon.

<span class="mw-page-title-main">Fannie Mae</span> Government-backed financial services company

The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the New Deal, the corporation's purpose is to expand the secondary mortgage market by securitizing mortgage loans in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations. Its brother organization is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac.

Predatory lending refers to unethical practices conducted by lending organizations during a loan origination process that are unfair, deceptive, or fraudulent. While there are no internationally agreed legal definitions for predatory lending, a 2006 audit report from the office of inspector general of the US Federal Deposit Insurance Corporation (FDIC) broadly defines predatory lending as "imposing unfair and abusive loan terms on borrowers", though "unfair" and "abusive" were not specifically defined. Though there are laws against some of the specific practices commonly identified as predatory, various federal agencies use the phrase as a catch-all term for many specific illegal activities in the loan industry. Predatory lending should not be confused with predatory mortgage servicing which is mortgage practices described by critics as unfair, deceptive, or fraudulent practices during the loan or mortgage servicing process, post loan origination.

<span class="mw-page-title-main">Freddie Mac</span> American government-sponsored enterprise

The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons, Virginia. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with its sister organization, the Federal National Mortgage Association, Freddie Mac buys mortgages, pools them, and sells them as a mortgage-backed security (MBS) to private investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. The name "Freddie Mac" is a variant of the FHLMC initialism of the company's full name that was adopted officially for ease of identification.

A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. Traditionally, banks and other lending institutions have sold their own products. As markets for mortgages have become more competitive, however, the role of the mortgage broker has become more popular. In many developed mortgage markets today,, mortgage brokers are the largest sellers of mortgage products for lenders. Mortgage brokers exist to find a bank or a direct lender that will be willing to make a specific loan an individual is seeking. Mortgage brokers in Canada are paid by the lender and do not charge fees for good credit applications. In the US, many mortgage brokers are regulated by their state and by the CFPB to assure compliance with banking and finance laws in the jurisdiction of the consumer. The extent of the regulation depends on the jurisdiction.

An eMortgage is an electronic mortgage where the loan documentation is created, executed, transferred and stored electronically.

<span class="mw-page-title-main">Real Estate Settlement Procedures Act</span>

The Real Estate Settlement Procedures Act (RESPA) was a law passed by the United States Congress in 1974 and codified as Title 12, Chapter 27 of the United States Code, 12 U.S.C. §§ 2601–2617. The main objective was to protect homeowners by assisting them in becoming better educated while shopping for real estate services, and eliminating kickbacks and referral fees which add unnecessary costs to settlement services. RESPA requires lenders and others involved in mortgage lending to provide borrowers with pertinent and timely disclosures regarding the nature and costs of a real estate settlement process. RESPA was also designed to prohibit potentially abusive practices such as kickbacks and referral fees, the practice of dual tracking, and imposes limitations on the use of escrow accounts.

The subprime mortgage crisis impact timeline lists dates relevant to the creation of a United States housing bubble and the 2005 housing bubble burst and the subprime mortgage crisis which developed during 2007 and 2008. It includes United States enactment of government laws and regulations, as well as public and private actions which affected the housing industry and related banking and investment activity. It also notes details of important incidents in the United States, such as bankruptcies and takeovers, and information and statistics about relevant trends. For more information on reverberations of this crisis throughout the global financial system see Financial crisis of 2007–2008.

The Mortgage Bankers Association (MBA) is the United States national association representing all facets of the real estate finance industry. Headquartered in Washington, D.C., MBA represents over 2,200 member companies. MBA’s membership base includes all sectors of the real estate finance industry including originators, servicers, unresidential, commercial, and multi-family arenas.

<span class="mw-page-title-main">Housing and Economic Recovery Act of 2008</span> US act of congress to address the subprime mortgage crisis

The United States Housing and Economic Recovery Act of 2008 was designed primarily to address the subprime mortgage crisis. It authorized the Federal Housing Administration to guarantee up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders wrote down principal loan balances to 90 percent of current appraisal value. It was intended to restore confidence in Fannie Mae and Freddie Mac by strengthening regulations and injecting capital into the two large U.S. suppliers of mortgage funding. States are authorized to refinance subprime loans using mortgage revenue bonds. Enactment of the Act led to the government conservatorship of Fannie Mae and Freddie Mac.

The U.S. subprime mortgage crisis was a set of events and conditions that led to a financial crisis and subsequent recession that began in 2007. It was characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.

The Home Valuation Code of Conduct is an American document created jointly by members of Freddie Mac and the Federal Housing Finance Agency, along with the New York State Attorney General.

<span class="mw-page-title-main">Mortgage industry of the United States</span>

The mortgage industry of the United States is a major financial sector. The federal government created several programs, or government sponsored entities, to foster mortgage lending, construction and encourage home ownership. These programs include the Government National Mortgage Association, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

The Home Affordable Refinance Program (HARP) is a federal program of the United States, set up by the Federal Housing Finance Agency in March 2009, to help underwater and near-underwater homeowners refinance their mortgages. Unlike the Home Affordable Modification Program (HAMP), which assists homeowners who are in danger of foreclosure, this program benefits homeowners whose mortgage payments are current, but who cannot refinance due to dropping home prices in the wake of the U.S. housing market correction.

<span class="mw-page-title-main">American Advisors Group</span>

American Advisors Group (AAG) is an American reverse mortgage lender. It provides government-insured Home Equity Conversion Mortgage (HECM) loans and has 81 geographical areas approved for business by HUD.

Embrace Home Loans Inc., formerly Advanced Financial Services Inc. (AFS), is an American full service direct mortgage lender. It is headquartered in Newport, Rhode Island. Embrace provides residential mortgage loans directly to its customers and is licensed in 46 states and Washington, D.C. The company employs 600+ people spanning 25 branches along the East Coast of the U.S.

Live Well Financial, Inc. ("LWF") was a privately owned mortgage originator, servicer and investor, licensed in the United States to operate in 46 states. The company offered government-insured Home Equity Conversion Mortgage loans, FHA single family mortgage loans, and Fannie Mae conforming loans. LWF is headquartered in Richmond, Virginia and has 3 retail origination branches, 2 in Richmond, Virginia and 1 in San Diego, California, with origination capabilities throughout the United States.

References

  1. ↑ "About MISMO | MISMO". www.mismo.org. Retrieved 2018-08-16.
  2. ↑ "Notice Pursuant to the National Cooperative Research and Production Act of 1993-The Mortgage Industry Standards Maintenance Organization". Federal Register. 2004-12-16. Retrieved 2018-08-16.
  3. ↑ "Subscriber List | MISMO". www.mismo.org. Retrieved 2018-08-16.
  4. ↑ "FHA Electronic Appraisal Delivery | HUD.gov / U.S. Department of Housing and Urban Development (HUD)". www.hud.gov. Retrieved 2018-08-16.
  5. ↑ "Ginnie Mae adopts MISMO for loan data delivery" . Retrieved 2018-08-16.
  6. ↑ Mac, Freddie. "Freddie Mac and Fannie Mae Will Update Appraisal Dataset and Forms". www.freddiemac.com. Retrieved 2018-08-16.
  7. ↑ "What is seen and what is not seen. - Free Online Library". www.thefreelibrary.com. Retrieved 2018-08-16.
  8. ↑ "Technology standards cut $249 from real estate loan costs". www.inman.com. Retrieved 2018-08-16.
  9. ↑ "Our Mission | MISMO". www.mismo.org. Retrieved 2018-08-16.
  10. ↑ "Benefits of being a member of MISMO | MISMO". www.mismo.org. Archived from the original on 2018-12-03. Retrieved 2018-08-16.
  11. ↑ "MISMO Announces Changes to Membership Structure | Mortgage Bankers Association". www.mba.org. Retrieved 2018-08-16.
  12. ↑ "MISMO Management Team | MISMO". www.mismo.org. Retrieved 2018-08-16.
  13. ↑ "MISMO By-laws" (PDF). www.mismo.org. December 15, 2017. Archived from the original (PDF) on September 26, 2020. Retrieved August 16, 2018.
  14. ↑ NationalMortgageProfessional.com (2018-04-11). "MISMO Creates Group Focused on Blockchain Technology". National Mortgage Professional Magazine. Retrieved 2018-08-16.
  15. ↑ "MISMO developing new eNote validation model | News | Dodd Frank Update". www.doddfrankupdate.com. Retrieved 2018-08-16.
  16. ↑ "eMortgage WG | MISMO". www.mismo.org. Retrieved 2018-08-16.
  17. ↑ "MBA requests mortgage industry input on unified MISMO closing instructions" . Retrieved 2018-08-16.
  18. ↑ "Implementation Guidelines | MISMO". www.mismo.org. Retrieved 2018-08-16.
  19. ↑ "Business Glossary | MISMO".
  20. ↑ "Educational Offerings | MISMO". www.mismo.org. Retrieved 2018-08-16.
  21. ↑ "Certifications | MISMO". www.mismo.org. Retrieved 2018-08-16.
  22. ↑ "MISMO Software Compliance Certification | MISMO". www.mismo.org. Retrieved 2018-08-16.
  23. ↑ Britt, Phil (2004). "AI and MISMO". Valuation Insights & Perspectives.
  24. ↑ "Alliance Partners". Archived from the original on 2012-04-05. Retrieved 2011-12-06.
  25. ↑ "About MISMO". Archived from the original on 2012-01-10. Retrieved 2011-12-05.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.