Real Estate: Mortgage Industry Standards Maintenance Organization (MISMO)

Real Estate

With all the information required for the successful purchase or lease of real estate prop-erty, there’s no doubt that XML standards will have a significant impact on this industry. The range of solutions required for the real estate industry ranges from the electronic exchange of property information to mortgage and financial transaction data. This section covers one of the more notable standards relating to mortgage and real estate finance.

Mortgage Industry Standards Maintenance Organization (MISMO)

Much of the paperwork and documentation in the real estate industry actually revolves around the mortgage, credit, and loan processes rather than in locating and describing real estate property listings. The process for purchasing a home through a credit agency is both rigorous and paper ridden. However, the Mortgage Industry Standards Maintenance Organization (MISMO), under the auspices of the Mortgage Bankers Association (MBA), is seeking to simplify this task by providing a single repository of XML DTDs for use in real estate finance transactions from origination through servicing.

The mechanism for these automated transactions is quite simple in comparison. For example, one company will send a standard MISMO Credit Request to another partici-pating company that, in turn, responds with a standard MISMO Credit Response. These transactions include all data that each company requires to process the exchange. MISMO has defined three deliverables to accomplish these goals. The first deliverable is a mortgage data dictionary. This dictionary includes the data elements present in MISMO Standard transactions. The dictionary also contains corresponding definitions, XML tag names, data requirements, and sources for the definitions of the supplied terms. The sec-ond deliverable for MISMO is an XML architecture that leverages the Web as its trans-port. The final deliverable is a relational data model that is provided to explain the relationships between the defined data elements and the necessity of those elements in a particular transaction.

MISMO set out to standardize information regarding loan data that is sent between two organizations and is relevant to a specific point in time and can span multiple transac-tions between trading partners. However, the intention of the specification is not to pro-vide a means for archival of loan data, although companies can archive the files as they are sent back and forth within the industry. Specifically, the data structures were not designed with archival in mind, but rather stateful data relevant to a particular instance in a transaction between organizations. Key elements of functionality in the specification include credit reporting, loan boarding, applications, service orders, underwriting, and supporting activities.

The overall MISMO information architecture consists of four levels that define the scope of various data elements and processes. The top level consists of common element types that define data entities, such as a person’s name or the name of a city, and can be used in more than one part of the MISMO architecture. The mechanism for the definition of these common elements is through a global DTD. The second level consists of DTDs maintained by an editorial committee of domain experts that corresponds to the message type defined by that DTD. For example, the underwriting DTD is designed to serve the needs of underwriting activities, and it is under the editorial control of a committee of underwriting experts. Data types are inherited from the top level when there is a match or are defined when there isn’t such a match. An editorial committee similarly controls the top-level, common meta-DTD to ensure consistency. The third level consists of a MISMO Union DTD that provides a means for MISMO messages to contain any number of any of the message types defined by committees in the second level. The MISMO Union, therefore, inherits all of the committee architectures of the other levels and gath-ers all the data for the industry in a single DTD for general release. The Union DTD can also be used as a source from which other DTDs may be derived, such as a Credit Reporting DTD or a Service Request DTD, or to create a DTD for the entire mortgage industry. The fourth and final level of the model consists of extensions to the MISMO Union that are contributed by other mortgage industry players, in order to serve their specific needs or the needs of their partners. MISMO calls this the application transla-tion layer (ATL).

MISMO has published specifications that support mortgage insurance application, mort-gage insurance loan boarding, bulk pricing, real estate services, credit reporting, and underwriting process areas. The specifications are freely available for industry imple-mentation via the MISMO Web site.