MISMO Software Compliance Certification Program Brown Bag Jan Davis Mary Ann Francis January 14, 2014 The MISMO Winter 2014 Summit Education Program is.

MISMO Software Compliance Certification Program

Brown Bag

Jan Davis

Mary Ann Francis

January 14, 2014

The MISMO Winter 2014 Summit Education Program is sponsored by:

Jan Davis & Mary Ann Francis: MISMO Software Compliance Certification Brown Bag

Winter 2014 Educational Summit & Workshops

Program Status and History

The Pilot Certification Program is underway!!!•Feasibility Analysis and Business Case completed in May 2013 (Phase 1)

•Program design work began at the end of June 2013 (Phase 2a)

•Program development was approved August 15 (Phase 2B)

•Feedback was collected throughout the process from multiple audiences including vendors, lenders, MISMO GC members, Board members, GSEs, and others. Feedback was consistent and supportive.

•The team designed and developed a two level program for certifying companies and their software and tools for use of the MISMO standards within a specific business domain.

•Pilot Program (Phase 3) began in late November 2013

•Transition to a broader roll-out is targeted for Spring 2014

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Jan Davis and Mary Ann Francis: MISMO Software Compliance Certification Program Brown Bag


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The objective of the assessment is to evaluate how the MISMO standard for a specified software product has been applied within a particular business domain.

MISMO will offer two levels of certification

Program Design Overview



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Comparison of Level Requirements

Component Level 1Standard

Level 2Premiere

Certification of company policies and practices

Certification of appropriate use of MISMO

Certification of software and tool capabilities using test cases

Self assessment required with MISMO staff approval

References or alternative validations from two separate entities

3rd Party review and sign off with recommendation for certification

Requirement for MISMO education and training

Annual Renewal



Program Design Concepts

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• Certification always includes a review of the company’s MISMO-related practices. Additional components of the certification process include reviews of product or component use of MISMO against appropriate portions of the Reference Model within the identified domain.

• In general both Standard and Premiere Levels require certification of the following:

– Certification of company policies and practices as related to MISMO.

– Certification of appropriate use of the MISMO schema and logical data dictionary for specified business domains.

– Certification of software or tool and proof of capability to store and/or create MISMO oriented data transmissions, interfaces, or reports.

• Premiere Level also requires certification of MISMO-related education policies and practices



Premiere Level Review - Example

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• What might an example premiere level review include?

– Apply for certification

– Identify and contract an Authorized Assessor for the review

– Review and decide upon applicable certification business domain

– Pre-review meeting with Authorized Assessor

• Agree on test case scenarios

• Confirm list of artifacts needed for review

– Authorized Assessor to complete on-site certification review

• Interview key personnel

• Review artifacts

• Complete testing of agreed upon test cases

– Remediation, if required for certification

– Certification report recommendation provided to MISMO Mgr

– Notification of Certification

Jan Davis & Mary Ann Francis: MISMO Software Compliance Certification Program Brown Bag


Compliance Program Value Proposition

Recognized compliance offers

– Public recognition– Brand differentiation– Preferred vendor status– Attraction as an integration

partner– Improved internal operational

processes• Known status against MISMO

objectives• Enhanced release planning

for MISMO utilization• Technical documentation of

MISMO testing

Benefits of participation include

– Ability to license “MISMO compliant” service mark

– Vendor listing on MISMO.org– Vendor listing in MBA Buyer’s

Guide (MBA members)– Other MBA/MISMO

recognition – Streamlined regulatory

compliance– Streamlined Agency

interaction (GSEs, GNMA, CFPB, etc.)

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Use of MISMO standards reduces processing costs, increases transparency, and boosts investor confidence in mortgages as an asset class. Participation in a MISMO software certification program will facilitate market and regulatory differentiation and enhance the value of the standard.



Benefits accrue as certification level rises

Standard Level

• Use of MISMO Standard Level Certification mark for specific Domains

• Allows for gradual progress toward Level 2 certification

• Provides immediate visibility and market recognition for MISMO participation, engagement, and use

• Enhances ability to stay in step with MISMO changes

Premiere Level

• Use of MISMO Premiere Level Certification mark for specific Domains which represents the highest level of Certification.

• Provides immediate visibility and market recognition for advanced assessment and participation

• Enhances ability to stay in step with MISMO changes

• Expert Independent assessment of compliance and testing of internal procedures

• Technical as well as policy assessment

• Associated knowledge transfer from Assessor

• Best practices sharing from Assessor

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Jan Davis and Mary Ann Francis: MISMO Software Compliance Certification Program Brown Bag


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Service Marks have significant content

MISMO Version

Levels

Domain

Potential Future Level



MISMO Residential

Appraisal

Appraisal

Origination

Closing

AUS

Application

Real Estate Services

Credit

Secondary

Loan Delivery

Product and Pricing

Servicing

Performing Loans

Loss Mitigation

Default

Servicing Transfers

Mortgage Business Process

Domains and Service Marks

Business Domain Certification OptionsBusiness Domains will be granular. Compliance will be certified and

certification marks awarded at the domain level.

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All others included

NotionalDomains

Applicant will provide test cases to demonstrate compliance within a domain. MISMO will provide example test cases for each domain.



Many Domains will be available


Business Domain/Certification Mark

Example test cases (just examples, could be more)

Appraisal Appraisal Appraisal Report Import or ExportMISMO 2.6 “UAD” Appraisal Export with 3.x changes

Origination Application

Loan EstimateClosing

V3.x 1003 import/exportMortgage Application v2.3 with V3.x changesProduct and Pricing import/exportCFPB Closing Disclosure Form

Underwriting Underwriting AUS interface with LOS vendorAUS v2.4 with 3.x changes

Real Estate Services Credit ReportingFlood InsuranceMortgage Insurance

Property Reporting

Title

For any RE Service, MISMO 3.x formatted import/exportCredit Reporting v2.4.1.1 with 3.x changesFlood v2.4 with 3.0 changesMI Application v2.4, MI Policy Cancel v2.4 with 3.x changesProduce 3.x Property ReportProperty Reporting v2.3.2 with 3.x changesTitle Service 3.x import/exportTitle v2.3.2 with 3.x changes

Secondary Loan DeliveryProduct / Pricing Pipeline Management and Hedging

MISMO Delivery “ULDD”; Emortgage to doc custodianProduct and Pricing v2.3.2 with 3.x changesPipeline Report

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Applicants will apply for certification of a software module, component, or tool to a specific business domain.



Many Domains will be available


Business Domain/Certification Mark

Example test cases

Secondary Loan DeliveryProduct / Pricing

Pipeline Management and Hedging

MISMO Delivery “ULDD”; one otherProduct and Pricing v2.3.2 with 3.x changesData for pricing and commitmentPipeline Report

Servicing and Investor Reporting

Monthly P&IDefaultLoss MitigationForeclosure Servicing TransfersAsset Management (REO)

Agency Reporting; data corrections; payment data Default ReportingLoan modification data import/exportForeclosure Payment Processing; nonperforming loan rptgLoan Bundling and Transfer; transfer to subservicerREO sale data transfer

Securitization PoolingDisclosure

Pool Delivery Process (MBS to Investor)Loan Level Disclosure for MBS

Document Document Document headers; specific documentsSMARTDoc® SMARTDoc® Electronic packaging

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Applicants will apply for certification of a software module, component, or tool to a specific business domain.



Domain compliance means:

• The software or tool uses the features, approaches and data available in v.3.x. Use of v3.x is expected. Use of alternate versions must be explained (e.g., use of 2.x is supported but must be explained).

• Published MISMO Implementation Guides (I-Guides) will serve as the benchmark for “conformity” where available and applicable.

• It is expected that compliance evidence and test cases demonstrate v3.x changes and extensions (if extensions have been made)

• For domains and business/test cases where extensions from 2.x exist, use of 3.x changes and extensions is expected

• Use of both the MISMO XML Schema and Logical Data Dictionary standards and definitions are expected

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Program Pricing

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Subscriber NonSubscriberLevel 1 Application 5,000$ 7,500$

Approval 1,000$ 2,250$ Total 6,000$ 9,750$ Renewal 5,000$ 7,500$

Level 2 Application 5,000$ 7,500$ Approval 1,000$ 2,250$ Total 6,000$ 9,750$ Renewal 5,000$ 10,000$

3rd Pty Application 5,000$ 7,500$ Approval 1,000$ 1,500$ Total 6,000$ 9,000$ Renewal 5,000$ 7,500$

Goals of Pricing Approach- Encourage Level 2 Participation- Encourage MISMO Subscriptions- Encourage 3rd Party Participation- Simplify accounting and fee structuresFeatures:- Nonmembers 1.5x member fees- L1, L2, Assessor fees are the same- Fees designed to cover program costs and raise revenue to enhance MISMO standards programs at reasonable cost to individual participants- MISMO fees for L2 assessment do not include cost of independent 3rd party assessor. Such costs would be negotiated between the vendor and 3rd party.

• A volume discount will be available for certification marks within the same product line. Application fees for the third and subsequent marks within the same product line will be discounted by 50%. • Program prices subject to change as work continues to vet pricing with potential participants.



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Pilot Considerations

Pilot Objectives

• In concert with MISMO partners, test, evaluate, adjust program processes and content

• Test, evaluate, adjust program materials

• Establish credibility through process refinement and quality service

• Create positive program buzz and case studies through successful implementation

Pilot Selection Criteria

• MISMO subscriber/ leadership

• Existing integration partners, both GSEs, Ginnie Mae, and vendors

• Mortgage Industry recognition for quality or innovation

• Have staff and management available in the Pilot timeframe

• Can demonstrate commitment to complete pilot effort in timeframe

Incentives

• Early view of program• Ability to influence

program• First listings and

recognition in promotions

• MISMO-led guidance in processes

• Conference panel slot to discuss

• First to gain all program benefits

Some Pilot participants have been identified but there is room for more!



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Pilot Program Participants

Authorized Assessor Applicants

• Actualize Consulting has been approved to be an Authorized Assessor and is available to discuss the program

• CAPCO is working on their application for authorization to be an assessor as part of the Pilot

Premiere Level Applicants

Three companies plan to apply for Premiere level certification in the Pilot Program run so far

Standard Level Applicants

MISMO is looking for Pilot candidates for Standard Level certification. Please contact Jan Davis or Mary Ann Francis for more information.

MISMO solicited participants in the Pilot Program through announcements in Industry Publications



How to Participate

• Remember—Certification is HELPFUL to your organization’s MISMO, Data, and Marketing strategies

• Materials for all program levels are available including

– Program Overview

– Standard and Premiere Level Process Guidance

– Draft Contractual Agreements (Standard contact still being finalized but very similar to Premiere Agreement)

– Pricing Sheet

• Complete a preliminary application and conduct an initial call with the MISMO operations team to discuss your application, the domain(s), and the process to become certified.

• Provide the legal agreements to your legal team for preliminary review as soon as possible. This will ensure that your application can be processed quickly once you decide to apply for certification and conduct the technical assessment process.

• Look for more announcements soon, especially at the MBA Tech Conference in March. A special presentation will be conducted on Friday March 21 at MBA Tech.

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THANK YOU!

• For more information or to provide additional thoughts or ideas contact the project team

• A new website will soon be available providing downloadable Program materials. Announcements will be made through the All MISMO listserv and NewsLink.

Contacts: Jan Davis

[email protected]

Mary Ann Francis

[email protected]

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Thank You to our 2014 Winter Summit Primary Event Sponsor

MISMO Software Compliance Certification Program Brown Bag Jan Davis Mary Ann Francis January 14, 2014 The MISMO Winter 2014 Summit Education Program is.

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