MISMO Defines Key Data For Mortgage Transactions Industry Standards Group
February 5, 2002
Invites Feedback in Push Toward Industry-Wide Consensus
WASHINGTON, D.C. AND NEW YORK, NY ? The commercial real estate finance industry took an important step toward greater market efficiency today with the release of theExposure Draft of the Originations Data Dictionary by the MISMO Commercial Working Group. The Exposure Draft of the Originations Data Dictionary is the result of a comprehensive effort to inventory all data elements used in originating commercial mortgages and define those elements to facilitate the efficient electronic exchange of information among industry participants in the immediate future. The document is intended as a "living text" whose creators now encourage the industry at large to respond with comments and suggestions.
"TheExposure Draft of the Originations Data Dictionary is a giant step toward a more efficient market, benefiting borrowers, mortgage bankers and lenders, as well as other market participants. Our Working Group has undertaken much of the heavy lifting in getting this long and complicated process under way. Now we need industry input to reach the consensus necessary to establish a reliable industry standard," said Joseph B. Rubin of Ernst & Young, LLP, who chairs the MISMO Commercial Working Group.
The MISMO (Mortgage Industry Standards Maintenance Organization) Commercial Working Group is composed of members of both the Mortgage Bankers Association of America (MBA) and the Commercial Mortgage Securities Association (CMSA), and includes prominent originators, lenders, services and technology vendors. The Commercial Working Group (also known as C-MISMO) has worked over the past year to build a commercial mortgage origination data standard that provides both the content and format for borrowers and mortgage bankers to transmit critical data to lenders. Added Adrian Corbiere, Senior Vice President for Multifamily at Freddie Mac, "The participation of so many industry players in the creation of the data dictionary points to broad-based support for this standards effort. This should contribute to its traction in the marketplace."
The Commercial Working Group has operated as a self-administered effort under the umbrella of MISMO. "The value of MISMO to all sectors of the real estate finance industry is underscored by the integration of the commercial standards effort to the well-established residential effort," said Shekar Narasimhan, Managing Director, Agency and Funds Management, Prudential Mortgage Capital Company. "MISMO - on an organizational and technological level - has provided a flexible framework that is well-suited to the unique nature of the commercial mortgage industry, and is part of a larger platform of technology initiatives for the entire industry." Established in 1999 by MBA, MISMO's mission is to develop, promote, and maintain voluntary electronic commerce standards for the mortgage industry.
The purpose of the commercial standard is not to dictate or mandate data requirements. Rather, the standard provides guidelines for lenders to follow, and sets expectations for the borrower as to the data required to be provided to a lender. The standard?s other key objective is to provide a structure and format, using XML schema, to move data easily among the parties to a transaction, including the borrower, lender, third party report providers, due diligence providers, rating agencies and investors. Today?s announcement signals that the first fundamental step toward achieving these goals is complete ? C-MISMO has inventoried the data elements necessary for the completion of mortgage transactions and defined each element. Subsequent steps will include creating standard computer architecture designed to facilitate efficient electronic transmission of data, and XML "tags" for all data elements. "The C-MISMO data dictionary facilitates consistency in reporting through standard definitions that help Fannie Mae more efficiently execute its multifamily e-business strategy across lenders" noted Caroline Blakely, Vice President for Multifamily E-business at Fannie Mae.
The members of the Commercial Working Group amplify the importance of a data standard for the commercial mortgage industry. Kenneth Hargreaves, Managing Director of David L. Babson and Company, Inc. in Springfield, MA, points out the long-term potential of the work of C-MISMO. "Once the industry has established the adequacy of this initial originations data dictionary and built the XML, it becomes possible to look at all the parts of the origination process and see where standards can be used to make the entire value chain more efficient for all players from borrower to mortgage banker to lender." In the nearer term, there will be a bottom-line impact on lending operations. "The data standards effort is going to produce so many tangible benefits to everybody who finances commercial and multifamily properties. Mailing and shipping cost reductions, faster turnaround times, less time spent scrubbing data and more time performing real value-added investment analysis - these are all things to which C-MISMO will contribute greatly, " noted Brian Stoffers, Executive Managing Director & COO for L.J. Melody & Company in Houston, TX.
Jack Cohen, CEO of Cohen Financial in Chicago, IL, has long been an advocate for using technology to reduce unnecessary impediments in the commercial lending process. "C-MISMO presents a roadmap for the commercial mortgage industry to improve the way we do business in a manner that is equally beneficial to all stakeholders. It won't occur overnight, but the data standards that this dictionary will lead to are the first of several steps that our industry will take that'll revolutionize the way commercial mortgages are made."
The MISMO Commercial Working Group includes Adigee Solutions, Berkshire Mortgage Finance, Bridger Commercial Funding, CapitalThinking, CapMark Services, Cohen Financial, The Debt Exchange, David L. Babson & Company, Ernst & Young LLP, e-Cognita Technologies, Fannie Mae, Freddie Mac, GMAC Commercial Mortgage Corporation, J.P. Morgan Mortgage Capital, L.J. Melody & Company, Legg Mason Real Estate Services, LoopLender, Midland Loan Services, MortgageRamp, Northmarq Capital, Precept, Principal Commercial Mortgage, Prudential Mortgage Capital Corporation, Thacher Proffitt & Wood and Trepp, LLC
Source: Mortgge Bankers Association