MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA MISMO for Newbies June 2012 Trimester...

MISMO Trimester MeetingJune 4 - 7, 2012 Santa Ana,

CA

MISMO for Newbies

June 2012 Trimester Education Track

Harry Gardner

President, SigniaDocsJune 4, 2012


CA

• Introductions• Things we’ll talk about today

– MISMO basics– Version 3 Reference Model– MISMO for Business Analysts– SMART® Documents in V3– XML, XPath and XSLT– Extending MISMO

• Keynote Speaker• Evening Reception (sponsored by Sapiens)

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Introductions and Agenda


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• Mortgage Industry Standards Maintenance Organization

• Formed in 1999 from XML Mortgage Partners• 501(c)6 subsidiary of MBA• Open to all • Freely available standards specifications• XML data standards for the mortgage lifecycle• Residential and Commercial sides• Process Area and Development Workgroups

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What is MISMO?


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MISMO StructureBoard of Directors

Architecture WG

Residential Governance

Core Data Structures

Council of Chairs

Process-Area Workgroups:Origination, Secondary, ServicingTax, Title, Credit, Flood, MI

Specialized Workgroups: Doc Classification, eMortgage, Business Rules, Interface Arch.

Development Workgroups


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• Logical Data Dictionary (LDD)• Reference Model (XML Schema)• Workgroups are comprised of subject-matter

experts in their process area• Workgroups vet data definitions they need for

their business exchanges• Core Data Structures reviews proposed data

points against existing LDD • All Workgroups use common structure of the

Reference Model• XML Schema provides extensibility

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Standards Development


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• MISMO standards– Openly created and openly available– Developed by industry consensus– Common language– Extensible

• Regulatory reporting specifications– Usually more “closed”– Created by regulators or private industry groups– Usually not aligned with existing open standards– Data quality is compromised– Cost impact

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Standards vs. Specifications


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Protects the intellectual property of MISMO contributorsPrevents anyone from burying a “submarine” patent into the standards and later claiming royalties for its use.

IPR Policy statement:

This meeting is governed by MISMO's Intellectual Property Rights and Antitrust Policies, which are posted on MISMO’s Web site at www.mismo.org. If you have questions about these policies, please contact the MISMO manager at 202-557-2880 or email [email protected] By participating in this meeting, you are agreeing to be bound by these policies.

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IPR and Antitrust Policies


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Questions?


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• Natural evolution from MISMO XML data transaction foundation

• UETA and ESIGN provided national legal framework for eSignatures

• eMortgage Workgroup formed in early 2001• Initial focus was to define technology and

also the process flow, but soon concluded that process should not be defined by MISMO

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eMortgage Background


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• Work Products:– Specifications– XML DTDs– Implementation Guides– Business / Tech / Legal Guidance– White Papers

• Co-Chairs: – Abdias Lira, Wolters Kluwer Financial Services– Rachael Sokolowski, Global Debt Registry

eMortgage Workgroup


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Legal Foundations• UETA – 1999 state law template – Adopted in 48

jurisdictions (remaining states have passed their own versions)

• ESIGN - Federal law signed in 2000 • Key provisions

– eSigning is an “opt-in” decision (all parties must agree to using this process)

– A document (electronic record) or a signature can be in electronic form

– They cannot be denied enforceability solely because they are in electronic form

• Technology-neutral– Does not define the format of the electronic record or signature

to be used


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Paper World Electronic World

Negotiable Instrument Transferable Record (“eNote”)

Original Note Authoritative Copy of eNote

Possession Control

Investor/Holder Controller

Custodian Location (eVault)

Endorsement and delivery Transfer of Control

Chain of endorsements Transferable Record Audit trail

Servicer Servicer

Definition Translation


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• Descriptive information (metadata)• Visual representation• Embedded data• Linking of the data and the visual representation• Electronic signatures• Tamper-evident security• Audit trail of changes

Electronic Document Requirements


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SecurableManageableArchivableRetrievableTransferable View

Data

Header

Map

Signatures

What the buyer sees and signs

Document type, other info

Maps View fields into Data

XML Data for lights-out processing

Electronic or digital signatures – buyer, seller, et al

Tamper-evident seal

May 1, 2003Closing Date

<ClosingDate>20030501 </ClosingDate>

Audit Trail History of events

SMART Doc® Framework (Ver. 1)


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Levels of “SMARTness”

XHTML

XML

XHTML

1 2 3Category:

VIEWType:

ARCs?

XML Data?

Image

4 5

XML XML

eNotes; other critical docs

Scanned docs;with or withoutdata

Data xferin stdzd wrapper

Why use?

Image


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• MISMO “Document” concept, common throughout all workgroups

• Flexible structure

• Any VIEW format (PDF, XHTML, Word…) can be incorporated with XML data

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SMART Doc V3


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What is the MERS® eRegistry?

• A National eNote Registry• The industry’s response to the e-document

requirements imposed by UETA and ESIGN• The central database that identifies the current

Controller (holder) and Location (custodian) of the Authoritative Copy of an eNote

• Not an e-Vault or eCustodian


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MERS® eDelivery

• Standardized delivery of electronic documents from one member to another

• Members use existing interface to MERS – eliminate multiple B2B custom interfaces

• Reuses MERS and MISMO standards of the MERS® eRegistry

• Required by Fannie Mae for delivery of eNotes


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A Hybrid World

• Hybrid loans: eNotes plus paper closing docs– Custodians must manage paper documents and

electronic documents for the same loan

• Hybrid pools: eNotes and paper Notes– eNotes generally identified by Special Feature

Code


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eMortgage Benefits • Certify Notes faster

– Industry data and document standards create uniformity– Eliminate re-keying, “stare and compare”– Transparency into depth of loan, data quality

• Automatically identify non-saleable loan issues– Improved compliance review– Increase fraud detection opportunities– More time to spend on problem Notes due to autocertification

• Process loans faster– Streamline best execution: a registered eNote can be acquired and

traded in minutes– Faster execution, lower risk

• Easier (e)Servicing, (e)Custodial setup

• Easier compliance with changing regulations


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• MISMO – www.mismo.org

• PRIA – www.pria.us

• SPeRS – www.spers.org

• MERS – www.mersinc.org

Resources


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Harry Gardner

President

SigniaDocs

[email protected]

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Questions?

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA MISMO for Newbies June 2012 Trimester...

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