Residential Magazine

Seth Appleton, Mortgage Industry Standards Maintenance Organization

MISMO reduces the friction in the mortgage process

By Jim Davis

Formed in 1999, the Mortgage Industry Standards Maintenance Organization (MISMO) has played a key role in making sure that the mortgage industry is working on the same page. MISMO creates standards for the industry that are accepted and deployed by every lender in the U.S., and they are required by most regulators and housing agencies as well as the government-sponsored enterprises.

These standards have been found to reduce per-loan costs, decrease errors and speed up the loan process, which ultimately saves money for borrowers, too. The organization continues to work to take the friction out of the mortgage process by developing common terms, definitions and shared datasets.

MISMO is working on a variety of projects, including an initiative to facilitate servicing transfers; a new standardized dataset that facilitates the electronic exchange of mortgage asset data to credit rating agencies; and guidelines for remote online notarizations and electronic documents used in the mortgage process. MISMO is a volunteer-driven organization. In 2021, MISMO began collecting a 75-cent-per-loan fee for support staff, something that hundreds of lenders voluntarily agreed to.

MISMO president Seth Appleton sat down with Scotsman Guide to talk about his organization and its accomplishments. He also spoke about where the group is headed.

MISMO was a volunteer organization set up by the Mortgage Bankers Association (MBA), correct?

It remains a wholly owned subsidiary of MBA, although we do have our own governance structure. We have historically been volunteer-driven and our volunteers, first and foremost, are crucial to our ability to develop standards and promote their adoption.

The scope of the work goes beyond what volunteers can do, right?

Volunteers have day jobs. It’s a very busy, competitive market right now. Subject matter expertise is one thing, but we were also asking them to do a lot of operational and administrative work, too. If we’re going to make good on our ability to accelerate the development of standards, to deliver value in a timely fashion, then we needed to bring some additional resources to bear for the organization.

That’s what the 75-cent-per-loan fee is for?

That’s right. We’ve been really pleased with the response from the industry. More than 1,500 residential lenders stepped up and voted with their wallets to invest in MISMO — and invest in their industry.

Does every lender have to pay the fee or is it voluntary?

It is a voluntary fee. We weren’t sure how it was going to go, but folks understand the importance of it. And I think lenders understand the importance of not only supporting MISMO but being engaged in MISMO, as well as making sure that they have a seat at the table.

How much money do you expect to generate and what does it pay for?

It’s highly cyclical as is the rest of the industry. I would say that we need to be in a position to be able to fund our ongoing initiatives and our staff, and make sure that we’re meeting the industry’s priorities.

It pays for not only all of MISMO’s operations, including staff, but also professional resources that we’ve brought to bear to accelerate key initiatives and key priorities. We still have tremendous support from other market participants through memberships and sponsorships, but having this kind of revenue source from the fee has been really critical for long-term planning, and for our ability to take on more and do it faster.

What else should mortgage professionals know?

How to get involved. I would say that our membership right now, and our active participation from all kinds of different segments of the market, is growing. It’s at its highest level ever. By the way, we do have a nascent commercial wing, and have published standards this year on commercial appraisals and also commercial green-utility data.

If you want to get involved, please reach out to us at We’re only as strong as the subject matter experts who show up and participate. ●


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