The State of National Standards

1
The State of National Standards

• Gabe Minton
• VP Industry Technology, MBA
• EVP, MISMO, Inc.

2
Agenda

• Benefits of industry standards and eCommerce
• State of national eMortgage standards
• State of national secure identity standards
• How it all fits together
• Questions?

3
eCommerce Enablers

• Legal Basis for Change
• UETA and ESIGN
• State and Local Laws, e.g., recording and
  notarization
• URPERA
• Technology and Standards
• Internet Information and Delivery
• Paperless data (XML) electronic records
  electronic signatures doc format
• MISMO mortgage lending and title
• PRIA recording and notarization
• Others LegalXML, NAR, ABA eTrust
• Business Process Redesign Opportunity
• Security and Privacy
• Consumer
• Industry players
• Legal

4
State of eCommerce in Industry

• Online originations
• Electronic service ordering and fulfillment
• Document imaging, paperless delivery
• Electronic signing solutions
• eClosing / eRecording / eNotarization
• eVaulting
• All leading toward true/full eMortgages

5
eMortgages Defined

• Minimally, an electronic mortgage note
• Created and signed electronically ownership
  transferred by electronic means
• eNote (i.e., the electronic asset) stored
  electronically
• More broadly, the security instrument and all
  other loan-related documents are created and
  stored electronically
• Hybrids - eDisclosures eNotices/eNote/eMort
  gage Lien
• - pDisclosures pNotices/eNote/pMortgage
  Lien
• - pDisclosures pNotices/eNote/eMortgage
  Lien

6
eMortgage Value

• Streamlined and efficient processes
• Reduced lights out cycle time
• Product enhancements and development
• Quicker response to a changing marketplace
• Increased customer and trading partner
  satisfaction

7
Common Benefits of Open Industry Standards

• Common language through data dictionary
• Mapping of terms between process areas
• Standardized data transactions
• Faster / cheaper / better
• Interface development in 2 weeks vs. 6 mos
• Much easier to add or subtract interfaces with
  business partners

8
Mortgage Industry Standards Maintenance
Organization

• XML Data standards for B2B transactions
• Over 5,000 data elements defined in Logical Data
  Dictionary (LDD)
• Covers all parts of the mortgage process from
  Application, Origination and Underwriting through
  to Secondary, Servicing, and Investor Delivery
• http//www.mismo.org

9
MISMO Organization
Board of Directors
eMortgage
Governance
SMART Doc
ePackaging
eMessaging
eVaulting
ROI
I-Guide
eRecording
PRIA
Core Data
eNotarization
CMSA
NNA
Logical Data Dictionary
SPeRS
USNA
Residential Process Area Workgroups
SISAC
Origination
Information Security
Underwriting
Mortgage App
Secondary
Closing
Servicing
Appraisal Institute
ALTA
10
Pieces of the eMortgage Puzzle
11
SMART Document Concept
Header
Document type, other info
Securable Manageable Archivable Retrievable Transf
erable
Audit Trail
History of events
View
What the buyer sees and signs
May 1, 2003 Closing Date
Map
Maps View fields into Data
Data
XML Data for lights-out processing
ltClosingDategt20030501 lt/ClosingDategt
Electronic or digital signatures buyer, seller,
et al
Signatures
Tamper-evident seal
12
eMortgage Process Flow
Legal eDocs (Land records, tax liens, other
docs/affidavits)
eRecording
eClosing
eSignatures
eNotarization
Buyer
Seller
13
Secure Identity Services Accreditation Corporation

• Wholly-owned non-profit subsidiary of MBA
• Setting baseline industry standards for
  accrediting Certificate Authorities
• Goal Interoperable PKI certificates that all
  meet the same baseline standards
• Now represented on BoD of Electronic
  Authentication Partnership (EAP)
• http//www.sisac.org

14
Electronic Authentication Partnership

• Citizens and consumers should have reliable
  identity management processes that lets them
  conveniently access information and services when
  authentication is needed. Our goal is to provide
  an easy means to use digital credentials issued
  by different authentication systems. To achieve
  this, we propose
• To create a voluntary partnership for governance
  of digital authentication among stakeholders from
  all levels of government, the private sector, and
  public interest groups.
• To have this partnership establish and maintain
  common policies and practices for credentials,
  credential providers and credential processors
  that will facilitate trust, interoperability and
  the easy evaluation and acceptance of various
  types of credentials issued by other parties.
• To develop an evaluation process for credentials,
  and to set standard approaches and minimum
  requirements for identity management.
• To build on and complement existing credential
  mechanisms for operating rules and associated
  processes.
• To work cooperatively with other nations
  identity systems.

15
Secure eMortgages
16
How They All Fit Together
How do we choose our ESIGN and UETA solutions?
What should we be thinking about?
How do we create and process eMortgage files?
How is the business data defined?
How do we know this is the real eNote?
How do we know which digital signatures to trust?
How do we plug all this into the County Recorder?
17
Conclusions

• Basic industry standards can provide significant
  cost savings
• eMortgages build on that for compelling value
  proposition
• eMortgage pieces are falling into place
• SMART Docs lock VIEW and DATA together, with
  great advantages such as lights out processing
• eRecording eNotarization standards are out and
  growing
• More counties becoming eRecording enabled
• Need national eNotarization standards badly
• MERS eRegistry provides legal infrastructure for
  eNote control and transfer (Section 16)

18
Questions?

• Gabe Minton
• gminton_at_mortgagebankers.org
• 202.557.2821
• Mortgage Bankers Association
• MISMO, Inc.