Seth Appleton: 4 Key Business Challenges MISMO is Addressing

Seth Appleton is President of MISMO, responsible for the mortgage industry standard organization’s overall strategy and direction. He came to MBA in December from HUD, where he served as Assistant Secretary of Policy Development and Research with HUD and as Principal Executive Vice President of Ginnie Mae.

Seth Appleton

MISMO’s mission is to develop industry standards to solve real estate finance’s thorniest and most pressing business challenges.

To make this happen, we drive collaboration across the mortgage industry and draw participation from all facets of the ecosystem.

This collaboration is key to MISMO’s success: it fuels our unique ability to bring disparate groups together to develop business solutions that deliver real value and guides us in our quest to operate better, faster, and stronger.

Among the many industry initiatives on which our 30-plus workgroups are focusing  their energy, I’d like to highlight four key industry challenges MISMO is working to solve, right now:

1.Lenders are looking for interoperability in the technology they choose and technology companies are looking to differentiate their products, leading MISMO to continue to expand its certification program;

2. MISMO is supporting the industry’s digital transformation efforts by creating next generation technology solutions;

3. The industry seeks greater efficiency, consistency and standardization with servicing transfers. MISMO has responded with a four-phase servicing transfer standards process that is seeing growing momentum within the industry.

4. MISMO is addressing the industry’s need to exchange commercial real estate appraisal information by creating a new dataset that facilitates the efficient exchange of information.

Lenders are updating their digital stacks and looking for ways to differentiate among products and ensure interoperability and compliance with MISMO standards. MISMO is responding by offering our new eMortgage Technology Certification program.

The new eMortgage Technology Certification program and our  existing MISMO Software Compliance Certification program are both designed to provide lenders with a level of assurance that the products they are selecting comply with industry standards. A wide range of other types of organizations have also expressed interest in these programs, including technology providers, loan originators, settlement agents, title underwriters, and investors.

Our first eMortgage Technology Certification program is our  popular Remote Online Notarizaion (RON) certification that allows companies to demonstrate compliance with MISMO’s RON standards. Nine companies have completed the RON certification over the past year.

In addition, we are adding a new eMortgage Technology certification program: eClosing Systems. These certifications provide clarity and transparency on which eMortgage technology providers comply with application MISMO standards/certification requirements.

The benefits of these certifications include: a consistent assessment process of eMortgage technology providers that supports the integrity and scalability of eClosings and eNotarization, an early ability to identify and remedy any potential issues, and the ability to reduce the resource burden of duplicative assessments and certifications by individual mortgage industry participants.

Another way we are addressing industry challenges is through next generation technology solutions. MISMO is at the center of the industry’s digital transformation efforts and our workgroups have been advancing solutions to meet the demands of today’s market including the API Toolkit and industry loan application dataset (iLAD)

The MISMO API (application programming interface) Toolkit helps facilitate rapid development of new products and applications across the mortgage industry.  

This toolkit builds upon MISMO’s JSON initiative to develop standards for consumer transactions. JSON is a lightweight language for structuring data that is frequently used to exchange information through APIs and mobile platforms. With this expanded effort, MISMO hopes to create consistency within the growing number of transactions taking place in JSON format. 

One example of a noteworthy project underway in the API space will allow lenders to look up loan limits across programs by property address using FIPS (Federal Information Processing Standard) Code. We invite you to join the FIPS Code API workgroup.

iLAD enables interoperability when exchanging data. It replaces the data exchange function of the Fannie Mae 3.2 file which is no longer being updated with the launch of the new Uniform Residential Loan Application (URLA). Here is a recent article from MISMO’s Jonathan Kearns that outlines the top reasons organizations should use iLAD.

Another industry challenge MISMO is addressing is servicing transfers, which have  long been a pain point for borrowers, lenders, servicers, and the industry overall. MISMO’s workgroup on this topic is up and running with a four-phase project to develop servicing transfer standards. And there is real momentum behind this initiative. Just a few weeks ago, the Federal Housing Finance Agency, in its annual scorecard for the GSEs and CSS, directed the GSEs to work with MISMO and the CFPB on data standards for these transactions.

And the fourth business solution we created is the MISMO Commercial Appraisal Standard. This new dataset facilitates the efficient exchange of commercial real estate appraisal information, which is critical for underwriting and loss mitigation, between multiple industry participants.

The public comment period for this new dataset ended on March 26 and it is now a Candidate Recommendation.

The MISMO Commercial Appraisal standard is creating a better experience for conducting and exchanging appraisal information for multifamily and commercial properties. It was developed from a collaborative effort of commercial real estate and technology professionals and has been updated to include new building-level data points, additions for non-multifamily property types and parties as well as refinements to various definitions and enumerations.

As you can see, MISMO is busy creating solutions for some of the mortgage industry’s most complex challenges. We are also actively pursuing a Private Label Securities (PLS) due diligence standard and we are soliciting feedback from various stakeholders to determine whether and how MISMO can help meet the industry’s needs with respect to Environmental, Social & Governance (ESG) initiatives.

We invite you to get involved in these or any MISMO initiative. I look forward to sharing additional updates in the months to come. And I invite you to part of industry innovation by joining the MISMO community. I can be reached at and look forward to hearing from you.