New MISMO reference model includes reverse mortgages

After embarking on an ambitious project designed to ease the technological processes and interfaces of the reverse mortgage industry compared to traditional mortgage workflows, the Mortgage Industry Standards Maintenance Organization (MISMO) announced this week that the latest version of its reference model includes reverse mortgage features.

On Tuesday, MISMO announced that the new version has reached “candidate recommendation status.” The group detailed three of its key features:

• A data file with a “representation of the data and relationships that support industry business processes”
• A new logical data dictionary (LDD) that offers a business-centric view of the model
• MISMO’s newest standards that provide guidance for the electronic formatting of documents.

The release also includes the “addition of greater support for the origination and underwriting of a reverse mortgage.” This is something that the organization has been working on for much of the past year.

Reverse mortgage industry professionals are hopeful that these standards can go a long way toward normalizing reverse mortgage products within the mainstream lending ecosystem, since they seek to address the challenges of more directly interfacing two kinds of workflows.

Late last year at the Mortgage Bankers Association (MBA)’s Annual Convention & Expo in Denver, HousingWire’s Reverse Mortgage Daily (RMD) sat down with Jonathan Kearns, MISMO’s vice president of technology, to discuss the nature of this work.

“Today, the reverse mortgage is a very cocooned, proprietary dataset in how it’s done,” Kearns said in November. “Lenders are very specialized in that space. So, the goal here is to open up and create standardized datasets for reverse mortgages, but also to base it on traditional mortgage data.”

If it’s accomplished sufficiently, it will be easier for a loan officer to directly compare a forward mortgage with a reverse mortgage and determine the best choice for an older customer, Kearns explained.

“Today, that’s not possible unless systems are integrated, but usually, it’s two distinct, separate systems,” he said. “Integrating the data between the two can’t happen today because reverse mortgage data is completely proprietary and non-standardized.”

Moving more directly to a uniform dataset is a chief goal of the dedicated reverse mortgage working group that’s spearheading the effort, according to George Morales, national sales director for Mortgage Cadence.

Last summer, Morales was appointed as chair of MISMO’s reverse mortgage working group. And late last year, Morales told RMD that the effort offered a unifying moment between companies that are traditionally competitors.

“If you just were to look at us on paper, you would see competitors,” Morales said in October. “But what you’re seeing is a common jar, and we’re all pouring into it [with a sense of common purpose].

“And the reason is that most of the conversations that I’m having really have to do with the people who are industry veterans. They’ve been in the space long enough to see that there’s a larger opportunity.”