The Mortgage Bankers Association last week raised the profile of its effort to develop industrywide Internet data exchange standards restructuring its technology committee and hiring standard-development veteran Gabriel Minton.
Its a reflection of how important the leadership of the MBA thinks technology is, said Robert M. Couch, president of New South Federal Savings Bank of Birmingham, Ala., and chairman of the committee. Developing the standards is one of the most pressing issues now, but an endless stream of other technology issues will come up.
Universal data exchange standards would enable all industry participants from origination software vendors to mortgage insurers to transmit data back and forth in a common language and format, instead of having to program their computer systems to accept and send data using multiple formats for multiple business partners.
Such standards are expected to produce substantial time and cost savings by making data exchange quicker and easier and by reducing extraneous documentation.
Consumers will benefit tremendously from the efficiency if everyone comes to the table and creates open standards, said Douglas G. Duncan, senior vice president and chief economist of the MBA.
The vehicle for developing the standards is called the Mortgage Industry Standards Maintenance Organization, or MISMO, which was set up by the MBA in 1999 and comprises MBA members, technology companies, and the government-sponsored enterprises Freddie Mac and Fannie Mae. In addition to Mr. Couch, Shekar Narasimhan, managing director of Prudential Mortgage Capital Co., is vice chairman.
Mr. Minton, whose new MISMO title is senior director of industry technology, was chairman of its architecture work group and helped develop its May release of data standards covering secondary commitment and delivery transactions and credit, underwriting, mortgage insurance applications, and service request processes.
Further, in recognition of technologys importance to the industry, the MBA has repositioned its technology steering committee to report directly to its board of directors. The committee previously reported to Mr. Duncan, but he said technology is so high-profile that he recommended the panel report directly to the associations leadership.
Last year MISMO released a dictionary of common data, focusing on elements relevant to single-family mortgage origination and underwriting, and it launched a Web-based repository tool as a central site for managing data elements and generating document definitions in XML, or extensible markup language.
XML, the data language MISMO is using to create its standards, is an open language, meaning it can be used by anyone. It has proven so popular with software giants such as Microsoft and Sun Microsystems that they have developed free software enabling other companies to program with it.
The MBA has also created a working group to develop an industry standard for electronic transactions on the commercial side of the mortgage business similar to the single-family standard on which MISMO has been working.
Mr. Minton is to oversee the trade groups leadership role in developing the standards, serving as staff representative to the technology steering committee. He also is to help develop a policy management authority to oversee a public key infrastructure for data protection.
Mr. Minton joins the MBA after being vice president of standards and alliances at Ultraprise Corp. of Frederick, Md., an Internet whole-loan trading marketplace.
Andrew D. Woodward, the associations president and the chairman of Banc of America Mortgage, said the actions underscore the trade groups belief in the importance of having the right technical knowledge and organizational structure in place to address the rapid technology-driven pace of change in the industry.