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MISMO Version 3: real-world implementation.

I have explained the framework of the MISMO[R] Version 3 (V3) Reference Model in past editions of this column, as well as how Fannie Mae and Freddie Mac, working with the Federal Housing Finance Agency, created the Uniform Mortgage Data Program (UMDP) by leveraging the MISMO extensible markup language (XML) data standards.

Many lenders and their technology providers have implemented previous versions of the MISMO standards, which are based on XML Document Type Definition (DTD) technology. We call these the "Version 2.x" standards, because they were published as a series of DTD transactions (2.0, 2.1, etc.) developed by the many process-area workgroups that comprise MISMO (Origination, Tax, Title, Flood, Mortgage Insurance, Property Valuation, Closing and more). Some workgroups released incremental versions as high as 2.6 before MISMO transitioned to the V3 framework and XML Schema.

Now that V3 is well established (Version 3.2 has been published for public review on, the conversation is focused more toward implementation and adoption.

The leadership of MISMO is well aware of the decision process that executives face when considering whether to migrate an existing data interface to a new standard. If the old interface still works, then it can be tough to justify the development and testing time needed to migrate.

Remember that the MISMO standards, at the highest level, are comprised of two key components: the Logical Data Dictionary (LDD) and the V3 Reference Model Schema (the "Model"). The LDD provides the data terms and their business definitions, and the Model defines how all of those terms "connect" with each other consistently. Together, they provide a semantically precise statement of the business information.

In Version 2.x, we had the LDD, but we did not have a single Reference Model. Instead, each workgroup published a DTD that defined the data transaction(s) they needed. Each DTD defined the relationship or structure of the data elements and attributes required. While this made for self-contained, well-defined transactions, it did not enforce consistency across all of MISMO.

For example, Greg Alvord, senior data architect at Houston-based ReaIEC Technologies Inc. and chief architect for MISMO, reviewed the 2.x transactions during the early development of V3 and found 17 different versions of the PROPERTY container!

Version 3 is focused on resolving these inconsistencies, and also on addressing the business problems that the mortgage industry had faced during the financial meltdown. If you consider a piece of data to be a "fact" about some aspect of a mortgage, the origination/closing/securitization process can be viewed as a steady deterioration of data transparency:

* Thousand of facts gathered during origination;

* Hundreds of facts transferred to servicing; and

* Dozens of facts used in bond risk determination.

In developing V3, MISMO focused on a few basic foundational tenets to facilitate the accurate communication of business information:

* "Things that are the same have the same name. Things that are different have different names."

* "Be conservative in what you send. Be liberal in what you accept."

* "Send what you have; I will take what I need."

Version 3 is designed to implement business semantics. It provides a single vocabulary that crosses boundaries along the value chain (the LDD), as well as a single model with common things in a common place, and unique things in a unique place (the Reference Model).

MISMO undertook an intensive work effort from 2007 to 2009 to bring V3 to fruition. RealEC Technologies' Alvord estimates that the MISMO volunteers have invested as many as 75,000 manhours of work into the standards over the past 12 years.

Here's an example why: For the V3 migration, first, all of the inconsistent container definitions had to be identi-fied and reconciled--all workgroups that used a given container had to agree that a new, single definition would meet their needs, or propose changes that would be acceptable to everyone else who used that container. Second, the Reference Model Schema had to be developed, to define the structural relationships of all containers, data elements and enumerations in V3.

The Reference Model eliminated the inconsistencies of V2.x--it is a single XML Schema definition where each container is used only once. Every workgroup that uses PROPERTY in its transaction now uses the same, single PROPERTY container in the Model. (A container is something that holds a collection of related data elements or holds one or more sub-containers.)

What does this mean? Obviously, the structure of PROPERTY is now consistent for all MISMO transactions. But more importantly, the relationships between all data elements and containers in the V3 Model are consistent throughout all workgroups. From a practical standpoint, an XML parsing engine that has digested the Schema of the Reference Model can receive and parse any workgroup transaction in V3 with very little additional effort.

This may be the most important difference between V3 and V2--in a Version 2.x transaction, the DTD was fully defined as a standalone entity. But in Version 3, all the effort to date has gone into the LDD reconciliation and the Reference Model development. That is to say, the individual workgroups are just now reaching the point where they can take a breath, stand back and focus more on their specific transaction requirements. They have created a Reference Model that contains all of their containers and data elements in a well-defined structure, but most have not yet published the guidance to the industry that says, "To create a specific MISMO Version 3.2 transaction, here are the requirements for the parts of the Reference Model that you must include."

MISMO participants came together during the January Trimester Meeting (sponsored by Lender Processing Services [LPS] in Jacksonville, Florida) to work on their business process areas, further expand and enhance the Logical Data Dictionary, and plan out the strategic priorities for 2012. Much of the discussion focused on this question of practical implementations--the real-world transition from the existing implementations of Version 2.x to Version 3.

The single highest priority we identified is for more of the workgroups to publish business use cases that define the application of V3 for specific transactions.

The Origination Workgroup has already done most of the work in mapping V3 to the HUD-1 form, and the Property and Valuation Services (PaVS) Workgroup has similarly been developing an Implementation Guide on the application of V3 for the Uniform Residential Appraisal Report (URAR) form. Look for much more of this to happen in 2012.

Other implementations are already happening today. A number of enterprises have viewed the V3 Reference Model as a valuable template that can be leveraged to align their own internal data systems, to save time and money.

One MISMO leader recently sent this message out to the Governance Committee: "I think it is worthy of notice that the new requirements for ULDD (Uniform Loan Data Delivery) announced by Fannie Mae and Freddie Mac yesterday will be easily implemented within [my company's] interface middleware with virtually no changes, due to our adoption of the Version 3 message architecture. It's a small example of the power and flexibility built into this standard. Thanks to all who made it possible!"

There is also a growing awareness of the value of V3 in the government sector. The UMDP is the biggest evidence of this so far, but other government agencies are learning that V3 can be leveraged for data-reporting requirements and for developing standardized forms with clearly defined data fields.

How can you get started? First, go to and download the standards from the Latest Specifications area. Also, click on Join a Listsery at the top, and sign up to receive the email discussions from any of the workgroups you are interested in. Then, if you have a specific question about the use of the Reference Model, feel free to post a question to the relevant listsery and a MISMO expert will likely respond with guidance.

Finally, help MISMO continue to move forward by contributing your own experience--join the discussion by joining the workgroup conference calls and attending the next Trimester Meeting in June, in sunny California, sponsored by First American Title Insurance Co. If your company is not a MISMO subscriber, encourage it to recognize the value of MISMO by becoming one.

Now that V3 is well established, the conversation is focused more toward implementation and adoption.

Harry Gardner is president at SigniaDocs. a Dallas-based eMortgage and document solutions provider, and is chair of the MISMO Residential Governance Committee. He can be reached at
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Title Annotation:The eMortgage Evangelist; Mortgage Industry Standards Maintenance Organization
Comment:MISMO Version 3: real-world implementation.(The eMortgage Evangelist)(Mortgage Industry Standards Maintenance Organization)
Author:Gardner, Harry
Publication:Mortgage Banking
Geographic Code:1USA
Date:Mar 1, 2012
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