MBA NewsLink Q&A: Asurity’s Karol Villavicencio Discusses the MISMO Mortgage Compliance Dataset
MBA NewsLink interviewed Karol Villavicencio from Asurity about MISMO’s Mortgage Compliance Dataset. Villavicencio received an MBA NewsLink Tech All-Star Award in 2024.
MBA NewsLink: For those still getting familiar with it, what is the Mortgage Compliance Dataset (MCD), and why is it becoming important for mortgage lenders now?
Karol Villavicencio: The Mortgage Compliance Dataset is an industry-standard loan data specification designed to standardize loan data fields and file delivery formats provided by lenders to state and federal regulators for mortgage origination compliance examinations.
It was developed to replace the legacy Loan Examination File (LEF) format. Transitioning to the MCD addresses long-standing industry challenges, where data translation/transformation errors, missing data elements, and the reliance on proprietary compliance formats have necessitated manual file reviews contributing to rising examination costs.
MBA NewsLink: What information does the MCD capture, and what should lenders understand about the data that goes into the file?
Karol Villavicencio: The MCD contains the type of information that falls under three general categories to do a baseline of regulatory threshold testing, including but not limited to HOEPA, QM, RESPA, TILA and TRID:
- Current ‘Snapshot’: The current loan terms and fees. For examination purposes, the current snapshot means loan terms and fees at closing or at the disclosure of a post-consummation closing disclosure.
- Every loan estimate (LE) and closing disclosure (CD): every LE and CD disclosure should be part of the MCD, including:
- Loan terms disclosed at the time of the LE/CD
- Fees disclosed at the time of the LE/CD
- Loan calculations disclosed on LE/CD: APR/Finance Charge/Total of Payments
- Change of Circumstance reasons and dates, as applicable
- Other key information: This includes key dates of other disclosures such as the Homeownership Housing Counseling List Disclosure, and rate set date.
MBA NewsLink: As regulators begin incorporating the MCD into mortgage examinations, what should lenders be doing now to prepare?
Karol Villavicencio: First, examinees should start preparing for the new format by ensuring their vendors support the export or import of the MCD. Several loan origination systems (LOS) and compliance vendors have announced updates to their technology to support the MCD. Examinees using a proprietary system should ensure the creation of an MCD file is on their near-term roadmap.
Second, examinees should devise a quality control system around the MCD–similar to other regulatory delivery of loan data, like the HMDA LAR. With a QC system in place, examinees should periodically conduct random checks to ensure the MCD files they generate accurately represent loan data.
Third, examinees should get to know where their data lives in their LOS/system of record. A data mapping exercise of how your data is saved allows you to identify any gaps early on and establishes a resource your team can utilize when troubleshooting in the future.
MBA NewsLink: For lenders relying on technology providers to produce or process the MCD, how can they validate that the file, and the data within it, is accurate?
Karol Villavicencio: The data on the MCD file should match the data on the disclosures and the data in your LOS or system of record. Licensees can review the data by importing the MCD file to another platform, such as a compliance vendor, and review the data and its results. Results should be accurate and the same as if you were running the loan through an integration between your LOS directly to the compliance vendor. Any inconsistencies detected should be reported promptly to your vendor. Examinees who have team members acquainted with the MISMO data reference model are well prepared to review the MCD file. While not required, having familiarity with how your loan data is reflected in the MISMO data reference model can improve the feedback loop between you and your technology vendor.
At Asurity, we are currently working with a few licensees and vendors that can produce MCD files to verify data mapping and review RegCheck compliance audit results. This testing is a critical component for ensuring that the adoption of the new standard can be relied upon across the board.
MBA NewsLink: What should lenders know about the MCD adoption timeline, and when might they begin seeing it incorporated into regulatory examinations?
Karol Villavicencio: Each regulator will need to decide when and how they will incorporate the MCD file as part of their examination process. Some regulators have announced adoption as early as the first half of 2027. We recommend you follow your regulator’s website to stay informed of any announcements regarding MCD adoption.
As more technology providers announce support of the MCD, we will see a greater interest among regulators to adopt the file for examinations.
MBA NewsLink: Much of the MCD conversation has centered on regulatory examinations. Does the standard have potential applications beyond the examination process?
Karol Villavicencio: Absolutely. At the end of the day, the MCD is just a loan data delivery method–similar to how a loan gets delivered to the GSEs. The MCD is not restricted to examination use. It can be utilized to communicate loan data between any two systems, and if you are using AI, it makes it easier to incorporate because it can reference the established MISMO reference data model.
MBA NewsLink: For organizations that want to learn more or help shape the next phase of the MCD, how can they get involved?
Karol Villavicencio: Interested participants can join the MCD Workgroup and/or attend MISMO Summits to get the latest updates on the MCD. Even if you may not be directly involved in originations, varying perspectives will help keep the standards well-rounded. Also, getting involved will give participants early insights and an opportunity to influence its direction. More information can be found at www.mismo.org/get-involved.
