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Many members have called or written to find out about what the Technology Committee has accomplished. This was the first year of existence for the Technology Committee. During its short tenure the committee's ranks swelled from 3 to more than 550 individuals. The committee had originally set out to establish its goals and encourage communication between itself and its members. The goal-setting was accomplished through many meetings and conference calls of the committee leadership, and communications were well established though programs, a newsletter and many articles. In retrospect, however, the committee spent most of its time being a proactive force in the industry.

The committee's proactive advocacy for our members fell into three categories: commentary for government agencies and sponsored enterprises; redirecting the standards efforts to help mortgage bankers successfully reengineer their workflow; and exploration of new technologies that members would have an interest in.

The year started off with a resolution passed by the Board of Governor's to aggressively pursue unified means for dealing with the agencies in several critical areas. Our first step was to lobby the agencies for participation, and once achieved to create a new committee: the InterAgency Technology Liaison Committee. Far from the simpler goals of creating the uniform standards for delivery and investor reporting of mortgages, this group has taken on a life of its own, becoming one of the mediating bodies for regulatory and legislative issues that affect the interrelationship of our members and the GSEs. Our members have enjoyed the opportunity to discuss operational and marketplace issues with top executives from Fannie Mae, Freddie Mac, GNMA and HUD through this group.

In addition to our focus on dealing with Fannie Mae, Freddie Mac and GNMA in a more consistent manner, we have also pursued the adoption of pool processing standards. Having come to understand the work the Participants Trust Company (PTC) has done, we will move to adopt their standard at the next committee meeting, and to encourage other groups to utilize it as well.

We have taken the first steps to standardize the data and operational procedures used in the exchange of servicing rights. We have a core group of individuals dedicated to the project on the Technology Committee, and we are working very closely with the Loan Administration Committee to ensure that their needs are well satisfied. The initiative itself has four phases, one of which will be completed during this fiscal year.

One of the tasks originally given to the Technology Task Force was to work with HUD to reengineer the claims process. The committee has been greatly involved in the pursuit of electronic claims submission and payment. On behalf of HUD we have been surveying members, leading focus groups, advising HUD's contractors and specifying how the project should move forward. At our insistence, HUD is redeveloping the single-family default monitoring system and mortgagee record change functions to better complement our members' workflows. The three transactions under development (record change, default reporting and claims) are on a fast track within the department and will culminate in early 1993 pilot programs.

The committee spent a great deal of time meeting with mortgage insurers during FY 1992. The electronic mortgage insurance transaction, under which those with delegated authority report their activities and those who use conventional approval methods will submit their loans, received ANSI approval late last year. Part of our implementation effort involved the design of a "return trip" transaction, whereby those who had ordered insurance would receive approval/declination/confirmation information directly through their computers. A focus for our members was a systems-level notification of receipt of initial premium and specified conditions (at post-closing). We achieved all these goals and voted favorably on the new transaction within a 90-day period. At this time, MBA is championing three isolated pilots that will help fine-tune the transaction.

Late in the first half of the fiscal year, the Technology Committee finished the long-standing development effort to have a tax service-mortgage banking company interface, except for delinquency reporting. The activities of six tax service companies, the three major service bureaus and many members have paid off in the development of a standard that can be used via tape, phone line or satellite. In the past two meetings of the tax service working group, we have made significant progress on the delinquency reporting problem.

In the last year, we have made some minor changes to the forced place hazard/flood notification form. The MBA standard is widely in use. We continue to work on the billings and renewals transaction set. The future of this standard is unsure however, as we are having difficulty agreeing on the purpose and scope with our trading partners, the insurance industry. The committee has most recently presented two major requirements for our continuance in the project. The first is a unified bill and declarations page. The second is equal electronic treatment for escrow and non-impound loans. We are currently awaiting a response from the insurance industries representatives on this issue. MBA has lobbied several major firms, such as State Farm, USAA and Allstate who have stated their intention to move ahead with us on this. The Technology Committee expects to begin the new fiscal year with a proposal from these insurers.

Many of our members have stated the importance of developing uniform credit report and appraisal standards. They wish to use these transactions to feed their artificial intelligence (AI) systems with data, or just to better manage information in the processing stages of the loan. The committee, reacting to this priority, established deadlines and a new set of co-chairs for this working group. The group composed of 50 percent members and 50 percent service providers has finished dealing with the competitive issues that were originally brought into the arena by the service providers. Having adequately put those issues behind us, we are moving toward the establishment of a draft standard.

The committee became involved with many issues in the past year of concern to our members. With regard to Federal Register filings, the committee framed responses to two issues. The first was the HUD-proposed rule on the Automated Clearing House (ACH). An early July publication of a HUD-proposed rule sought commentary on a requirement that would mandate the use of the ACH system (in lieu of checks) for all upfront MIP transactions. The committee's response, laid out areas of concern and technical limitations that would have to be resolved prior to implementation.

We also requested that HUD consider utilizing the ACH tools in the two areas that we had requested, claims and monthly risked-based premiums, in the near future. We also commented on the HUD and Department of Agriculture's joint initiative to expand HUD's credit alert interactive voice response (CAIVR) system to include the records of Department of Agriculture. In the letter, we made clear that while MBA advocates prudent risk management, the details of the system for checking records must be worked out so as not to make the program unusable or unattractive for prospective mortgagors.

Though we did not file commentary, we were interested in the Federal Register publication of the National Institute of Standards and Technology. Three independent entries by this organization have made us focus on our committee's relationship with that agency. Two of its major projects, the digital electronic signature standard (for those signing government authorized forms) and their graphics standard, are of particular concern to mortgage bankers and their relationship with government agencies in the years ahead. On behalf of the membership, we requested in-depth information from the agency about its published notices and its overall direction.

During the course of the year, the committee was asked to meet or comment on many industry issues. With HUD, our major meetings focused on claims, default monitoring, ACH, computer records management and barcoding. Our work with Fannie Mae included discussion of delivery of mortgages, post-purchase reviews, standardized claims filing, program index data modeling, imaging, artificial intelligence as well as our work with the IAT group on our committee's projects and the GSE legislation. With Freddie Mac, we concentrated on many issues previously listed, as well as helping them accommodate our members needs and concerns with their new investor reporting system.

The committee also worked with many other agencies. We worked on several issues with the Resolution Trust Corporation, Department of the Treasury, PTC, GNMA and its contractors (MBSCC & Chemical Bank), Appraisal Standards Review Board, as well as with the Veterans Administration and others.

As this fiscal year draws to a close, the committee leadership is pleased with its progress, yet is anxious to move forward on the work that must be done to complete many of the initiatives previously established. One thing that mortgage bankers can always count on is change. The committee intends to be a tool to help deal with that change. By getting ahead of pending regulation and operational changes, we can best thrive throughout the 1990s.
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Title Annotation:accomplishments of the Technology Committee of the Mortgage Bankers Association of America
Author:Hershkowitz, Brian
Publication:Mortgage Banking
Date:Sep 1, 1992
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