MISMO / eMortgage Update
- 1. MISMO / eMortgage Update Harry Gardner President, SigniaDocs, Inc. Chair, MISMO Residential Governance Committee November 9, 2011
- 2. MISMO Standards • Logical Data Dictionary (LDD) – Over 5,000 data points and enumerations (lists of values), with business definitions agreed-upon by industry participants – Workgroups vet data points and definitions they need for their business exchanges – Core Data Structures reviews proposed data points against existing LDD • Version 3 -- XML Schema – Reference Model sets the structure and relationships for all those data points – Extensible – business partners can add their own custom data 2
- 3. MISMO Structure Board of Directors Residential Governance Core Data Structures Architecture WG Council of Chairs Process-Area Workgroups: Specialized Workgroups: Origination, Secondary, Servicing Doc Classification, eMortgage, Tax, Title, Credit, Flood, MI Business Rules, Interface Arch. Development Groups 3
- 4. Standards Development • IPR policy allows competitors to come together and develop data standards that benefit everyone • Compete on services and technology, not data formats • Reference Model ensures common XML structure • Conf Calls – Workgroups, Development Groups • Trimester Meetings – January, May, September • Standards are constantly being expanded to meet real-world needs of the industry 4
- 5. Standards vs. Specifications • MISMO standards – Openly created and openly available – Developed by industry consensus – Common language – Extensible • Regulatory reporting specifications – Usually more “closed” – Created by regulators or private industry groups – Usually not aligned with existing open standards – Data quality is compromised – Cost impact 5
- 6. Industry Adoption • Early days – mostly front-end services: tax, title, flood, MI – request/response transactions • Extended into Origination, Underwriting, Secondary delivery and Servicing setup • Now mandated by FHFA for Fannie & Freddie: • UMDP: Uniform Mortgage Data Program – ULDD: Uniform Loan Delivery Dataset – UAD: Uniform Appraisal Dataset 6
- 7. SMART Doc V3 • MISMO “Document” concept, common throughout all workgroups • Addresses shortcomings of SMART Doc V 1.02 • Flexible structure • Any VIEW format (PDF, XHTML, Word…) can be incorporated with XML data • Working with MBA, MERS, Fannie Mae and Freddie Mac to coordinate and plan transition to SMART Doc V3 7
- 8. SMART Doc V3 Simplified Diagram Document Classification Deal Sets Map … Document Views … … Signatories Audit Trail System Signatures
- 10. Real-World Application of Electronic Signatures Jeff Knott Director, Product Management Equifax November 9, 2011
- 11. Today’s Roadmap • Market Challenges • Multiple Use Cases • eSignature Case Study – IRS Form 4506-T – Market Problem – Proof of Concept – Program Objectives – Value Proposition • Q&A
- 12. Market Challenges • Fraud • Compliance – Laws and Regulations – Internal Policy • Security – System Access – User Authentication • Process Adoption
- 13. Multiple Use Cases • Mortgage Qualification • Credentialing • Background Investigation Risk Customer • Consumer Finance Mitigation Acquisition • Accounts Receivable • Government Programs • Property Management Quality Control Service Renewal • Brokerage Services • Insurance Customer Lifecycle • And more . . .
- 14. Acceptance of eSignature on IRS Form 4506-T CASE STUDY
- 15. IRS Income Verification Express Service (IVES) Program • Personal Tax, Business Tax, and Wage Statements • Registered IVES program participants; authorized 3rd parties • Documents retrieved directly from the IRS • Consent-based service • IRS form (4506-T, 4506-EZ, or 4506) must be signed within 120 days Client IVES Participant IRS Service Center Order Form 4506-T Form 4506-T Tax Document Tax Document Acquisition & Quality Check Tax Transcript Decisioning Process & Fulfillment Fulfillment Process 15
- 16. IRS Form 4506-T Taxpayer’s SSN Previous Address Enter Form Type Check box for 1040 Check box for W2, 1099 Enter Years Requested Date within 120 days Signature
- 17. Market Problem • Traditionally the IRS Return and Income Verification Services (RAIVS) team does not allow the use of electronic signature on its Form 4506-T as an alternative to ink signatures. • Electronic commerce is enjoying rapid adoption across many sectors, in both business and government transactions. • Methods for initiating, completing and recording electronic signatures and records are expanding as demand increases, with many technologies to choose from in the market. • Due to current economic conditions, especially in the mortgage industry, and increased regulations, this type of electronic processing can be leveraged to solve a widely recognized efficiency concern.
- 18. Industry Leadership Equifax & DocuSign • Championing industry enhancements • Defining and aligning policies, standards, and rules • Identifying data stakeholders and their goals • Communicating with accountability to stakeholders • Providing mechanisms for review and issue resolution Policy Data Quality & Strategy Management
- 19. Proof of Concept • Equifax and DocuSign have partnered with the IRS to initiate a small-scale, limited-scope experiment involving the submission of electronically signed forms to the IRS through a trusted third party • This pilot would enhance the IVES program by allowing either a “wet” ink or electronic signature to be used by taxpayers on a Form 4506-T
- 20. IRS Requirements • Support the electronic filing goals of the IRS Restructuring and Reform Act of 1998 (RRA 98) by enabling electronic signature technologies • Comply with the requirements of Section 508 of the Rehabilitation Act • Protect citizen rights and privacy, limit burden, and promote broad acceptance of electronic commerce • Use technologies and processes that facilitate electronic filing, payment, and communication without relying on paper-based signatures • Replace paper transactions with electronic methods that are more accurate and less expensive to process • Have security appropriate for the level of risk • Are based as much as practicable on established laws and existing frameworks, including time-tested industry practices
- 21. eSignature Objectives • Require no changes to IRS policy or procedure • Require no changes to trusted third party relationships • Test the effect of electronic signing on the Taxpayer experience • Improve Taxpayer privacy over current levels • Reduce 4506-T rejection rates from current IRS levels • Improve data integrity and security • Test the ability of electronic processing to solve a widely recognized efficiency concern within the IRS
- 22. Value Proposition • Electronic signature acceptance by the IRS on Form 4506-T: – Promotes use of tax transcripts – Reduces lost paperwork – Minimizes signature fraud – Streamlines processes – Lowers costs
- 23. Questions and Answers Thank you.
Editor's Notes
- #6: Final released versions are posted for open download from MISMO.ORGSubscribers have access to draft versions as they are developedCan be extended via NameSpaces – but extensions are often incorporated into the next release as part of the full standards, so although MISMO creates standards, they are far from static – constantly expanding and evolving to meet the needs of those who use them.Data quality of regulatory reporting specs – CSBS, ASF examples – comma-delimited format, limited or different enumerations, varying matches to MISMO granularityRegulators can help their constituents save $$ by aligning to existing, adopted standardsMISMO welcomes opportunities to expand the LDD and reference model with additional data needed for regulatory purposesEveryone benefits through cost savings and better data quality (which is the core value of having this data reported in the first place)