June 2012 Trimester Education Track
MISMO for Newbies
Harry Gardner
President, SigniaDocs
June 4, 2012
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
Introductions and Agenda
• Introductions
• Things we’ll talk about today
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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)
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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What is MISMO?
• 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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
3
MISMO Structure
Board of Directors
Residential Governance
Core Data Structures
Architecture WG
Council of Chairs
Process-Area Workgroups:
Origination, Secondary, Servicing
Tax, Title, Credit, Flood, MI
Specialized Workgroups:
Doc Classification, eMortgage,
Business Rules, Interface Arch.
Development Workgroups
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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Standards Development
• 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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
5
Standards vs. Specifications
• MISMO standards
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Openly created and openly available
Developed by industry consensus
Common language
Extensible
• Regulatory reporting specifications
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Usually more “closed”
Created by regulators or private industry groups
Usually not aligned with existing open standards
Data quality is compromised
Cost impact
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
6
IPR and Antitrust Policies
Protects the intellectual property of MISMO contributors
Prevents 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 info@mismo.org
By participating in this meeting, you are agreeing to be bound by
these policies.
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
7
Questions?
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
8
eMortgage Background
• 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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
9
eMortgage Workgroup
• 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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
Definition Translation
Paper World
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Negotiable Instrument
Original Note
Possession
Investor/Holder
Custodian
Endorsement and delivery
Chain of endorsements
Servicer
Electronic World
Transferable Record (“eNote”)
Authoritative Copy of eNote
Control
Controller
Location (eVault)
Transfer of Control
Transferable Record Audit trail
Servicer
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
Electronic Document Requirements
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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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
SMART Doc® Framework (Ver. 1)
Securable
Manageable
Archivable
Retrievable
Transferable
Header
Document type, other info
Audit Trail
History of events
View
May 1, 2003
Closing Date
What the buyer
sees and signs
Map
Data
<ClosingDate>20030501
</ClosingDate>
Signatures
Tamper-evident
seal
Maps View fields into Data
XML Data for lights-out
processing
Electronic or digital signatures
– buyer, seller, et al
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
Levels of “SMARTness”
Category:
VIEW
Type:
1
2
3
4
XHTML
XHTML
Image
Image
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ARCs?
XML Data?
Why use?
XML
eNotes;
other critical
docs
XML
Scanned docs;
with or without
data
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
XML
Data xfer
in stdzd
wrapper
SMART Doc V3
• MISMO “Document” concept, common
throughout all workgroups
• Flexible structure
• Any VIEW format (PDF, XHTML, Word…)
can be incorporated with XML data
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
20
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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
Resources
• MISMO – www.mismo.org
• PRIA – www.pria.us
• SPeRS – www.spers.org
• MERS – www.mersinc.org
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
Questions?
Harry Gardner
President
SigniaDocs
hgardner@signiadocs.com
MISMO Trimester Meeting
June 4 - 7, 2012
Santa Ana, CA
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