MISMO Says It Has Roadmap for Electronic Mortgages.(Letter to the Editor)

Orlando, FL -- How do I, a lender, even do an electronic mortgage? What's the difference between electronic and paperless? How much cost savings are involved? Conversely, how much investment does it require? The Mortgage Industry Standards Maintenance Organization has been trying to help clear up the e-mortgage questions that have been swirling throughout the industry for the past 15 plus years with the release of it E-Mortgage Guide at the MBA annual here.

This year's MBA technology study found that lending IT budgets are expected to climb by 15% in the next year. This is proof that lenders are taking a hard look at their technology, evaluating what's available and looking to take their shops to the next level.

But what is the next level? Most lenders are jumping on the paperless bandwagon, but paperless isn't necessarily electronic. Enter the MISMO E-Mortgage Guide to add some clarity. MISMO describes the guide as an "industry reference tool, providing voluntary guidelines to facilitate e-mortgage processes, and reduce time, cost and risks."

In total, the document is 70 pages and is broken down into five parts, an executive summary, e-mortgage benefits, legal issues, key concepts and industry processes. The guide describes its scope as one that "describes and explains industry-standard concepts, definitions and high-level processes. It is not intended to be a technical implementation guide. Rather, this guide provides general information about the legal framework surrounding e-mortgage implementation."

The guide places a lot of emphasis on how important SMART Docs are and how they are legally binding. "Although the supporting MISMO standards and other technologies are equally significant, the SMART Document concept is the key point for executives and managers in mortgage banking to grasp in order to leverage this pivotal e-mortgage business opportunity," the guide notes. "After the legal framework for e-mortgages was established in 2000, MISMO developed the technical specification required to create digital documents that could be legally exchanged across the industry to replace their paper counterparts.

"The fundamental idea embodied by the SMART Document specification is the encapsulation of the document data with a corresponding digital view of the document to replace the paper documents we know today. This secure digital object (the data combined with the document view) can then be managed, validated and manipulated electronically. Once your process is enabled using the SMART Document specification for your electronic documents, workflow systems can be configured to automatically validate the data, to review against business rules and to execute the transaction logic necessary to complete mortgage banking processes electronically," according to the guide.

The document provides an overview of the process, but becomes a bit technical at times. E-mortgage ROI is only given two pages of the 70, but it's the depth of the material in the other 68 pages that makes the difference. Legal issues that have held the industry away from adoption are ...