Industry News

The first group, the Third Party Business Partners Risk Management Community of Practice, will provide a forum for industry-wide discussion of issues associated with the use of third-party service providers. This group is expected to develop best practices or standards for different aspects of third-party risk management.

The second group, the Third Party Oversight Questionnaire Development Workgroup, is charged with adopting a standard list of questions that lenders and servicers can use to assess third parties.

"As our industry continues to expand, third party compliance and oversight have become major business obstacles," said Rick Hill, executive vice president of MISMO. "Lenders and servicers are ultimately responsible for the work of third parties, but current practices for managing risk associated with third parties are often inefficient and expensive. As regulatory and investor requirements continue to push costs higher, the lack of industry-wide standards or best practices is costly for all involved. A collaborative effort to develop best practices and standards that includes lenders, service providers, investors and regulators, offers the opportunity to foster more efficient and productive third party risk management strategies that will benefit lenders, service providers and others."

The Third Party Business Partners Risk Management Community of Practice will provide a forum that allows industry participants to discuss challenges and concerns involved with third party oversight. The group's goal is to develop and encourage use of new standards, strategies and best practices for evaluating and managing third parties. Issues under consideration include risk assessment procedures across all stages of the relationship, including on boarding of third parties. Title and settlement companies, lenders, servicers, service providers, appraisers, software vendors, business groups and regulators are all invited to participate.

The Third Party Oversight Questionnaire Development Workgroup will adopt a standard set list of questions mortgage companies can use to assess third parties. The standardized questionnaire will provide a consistent and efficient way to collect information needed to assess third parties and the risks associated with their products and services. As part of this effort, the Workgroup will evaluate existing marketplace questionnaires to determine if they can be utilized in the mortgage industry standard. The Workgroup will also create guides for implementing and using the questionnaire.

Individuals and companies do not have to be members of MISMO to join either group, but only MISMO members will be able to vote on any standards or serve in leadership roles.

Those interested in joining the Third Party Business Partners Risk Management Community of Practice should send an email with the subject "Join MISMO Third Party Business Partner CoP" to [email protected] by Aug. 17.

For the questionnaire group, send an email to [email protected] with "Third Party Questionnaire Group" in the subject field. More information on both industry-wide efforts can be found at www.mismo.org.