MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA MISMO for Newbies June 2012 Trimester Education Track Harry Gardner President, SigniaDocs June 4, 2012

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Introductions Things we’ll talk about today –MISMO basics –Version 3 Reference Model –MISMO for Business Analysts –SMART® Documents in V3 –XML, XPath and XSLT –Extending MISMO Keynote Speaker Evening Reception (sponsored by Sapiens) 2 Introductions and Agenda

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Mortgage Industry Standards Maintenance Organization Formed in 1999 from XML Mortgage Partners 501(c)6 subsidiary of MBA Open to all Freely available standards specifications XML data standards for the mortgage lifecycle Residential and Commercial sides Process Area and Development Workgroups 3 What is MISMO?

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA 4 MISMO Structure Board of Directors Architecture WG Residential Governance Core Data Structures Council of Chairs Process-Area Workgroups: Origination, Secondary, Servicing Tax, Title, Credit, Flood, MI Specialized Workgroups: Doc Classification, eMortgage, Business Rules, Interface Arch. Development Workgroups

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Logical Data Dictionary (LDD) Reference Model (XML Schema) Workgroups are comprised of subject-matter experts in their process area Workgroups vet data definitions they need for their business exchanges Core Data Structures reviews proposed data points against existing LDD All Workgroups use common structure of the Reference Model XML Schema provides extensibility 5 Standards Development

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA MISMO standards –Openly created and openly available –Developed by industry consensus –Common language –Extensible Regulatory reporting specifications –Usually more “closed” –Created by regulators or private industry groups –Usually not aligned with existing open standards –Data quality is compromised –Cost impact 6 Standards vs. Specifications

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Protects the intellectual property of MISMO contributors Prevents anyone from burying a “submarine” patent into the standards and later claiming royalties for its use. IPR Policy statement: This meeting is governed by MISMO's Intellectual Property Rights and Antitrust Policies, which are posted on MISMO’s Web site at If you have questions about these policies, please contact the MISMO manager at or By participating in this meeting, you are agreeing to be bound by these policies. 7 IPR and Antitrust Policies

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA 8 Questions?

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Natural evolution from MISMO XML data transaction foundation UETA and ESIGN provided national legal framework for eSignatures eMortgage Workgroup formed in early 2001 Initial focus was to define technology and also the process flow, but soon concluded that process should not be defined by MISMO 9 eMortgage Background

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Work Products: –Specifications –XML DTDs –Implementation Guides –Business / Tech / Legal Guidance –White Papers Co-Chairs: –Abdias Lira, Wolters Kluwer Financial Services –Rachael Sokolowski, Global Debt Registry eMortgage Workgroup

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Signed electronically –eDocs (with e-signatures) for initial disclosures and loan closing package eDocument = Data + View –Ability to confirm that the document is exactly what the consumer e-signed –Data payload for automated processing eNote registered on MERS ® eRegistry –Identifies owner and location of electronic “original” Note vs. copies Paperless vs. “Less Paper” –Scanned images for rest of file (borrower conditions, etc.) eMortgage Details

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Legal Foundations UETA – 1999 state law template – Adopted in 48 jurisdictions (remaining states have passed their own versions) ESIGN - Federal law signed in 2000 Key provisions –eSigning is an “opt-in” decision (all parties must agree to using this process) –A document (electronic record) or a signature can be in electronic form –They cannot be denied enforceability solely because they are in electronic form Technology-neutral –Does not define the format of the electronic record or signature to be used

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Paper World    Electronic World Negotiable InstrumentTransferable Record (“eNote”) Original Note Authoritative Copy of eNote PossessionControl Investor/HolderController CustodianLocation (eVault) Endorsement and deliveryTransfer of Control Chain of endorsementsTransferable Record Audit trailServicer Definition Translation

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Descriptive information (metadata) Visual representation Embedded data Linking of the data and the visual representation Electronic signatures Tamper-evident security Audit trail of changes Electronic Document Requirements

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Securable Manageable Archivable Retrievable Transferable View Data Header Map Signatures What the buyer sees and signs Document type, other info Maps View fields into Data XML Data for lights-out processing Electronic or digital signatures – buyer, seller, et al Tamper-evident seal May 1, 2003 Closing Date Audit Trail History of events SMART Doc® Framework (Ver. 1)

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Levels of “SMARTness” XHTML XML XHTML 123 Category: VIEW Type: ARCs? XML Data? Image 45 XML eNotes; other critical docs Scanned docs; with or without data Data xfer in stdzd wrapper Why use? Image

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA MISMO “Document” concept, common throughout all workgroups Flexible structure Any VIEW format (PDF, XHTML, Word…) can be incorporated with XML data 17 SMART Doc V3

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Document Document Classification Deal SetsMapViews … …… SignatoriesAudit Trail System Signatures Simplified Diagram

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA What is the MERS ® eRegistry? A National eNote Registry The industry’s response to the e-document requirements imposed by UETA and ESIGN The central database that identifies the current Controller (holder) and Location (custodian) of the Authoritative Copy of an eNote Not an e-Vault or eCustodian

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA 20 MERS ® eDelivery Standardized delivery of electronic documents from one member to another Members use existing interface to MERS – eliminate multiple B2B custom interfaces Reuses MERS and MISMO standards of the MERS ® eRegistry Required by Fannie Mae for delivery of eNotes

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA A Hybrid World Hybrid loans: eNotes plus paper closing docs –Custodians must manage paper documents and electronic documents for the same loan Hybrid pools: eNotes and paper Notes –eNotes generally identified by Special Feature Code

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA eMortgage Benefits Certify Notes faster –Industry data and document standards create uniformity –Eliminate re-keying, “stare and compare” –Transparency into depth of loan, data quality Automatically identify non-saleable loan issues –Improved compliance review –Increase fraud detection opportunities –More time to spend on problem Notes due to autocertification Process loans faster –Streamline best execution: a registered eNote can be acquired and traded in minutes –Faster execution, lower risk Easier (e)Servicing, (e)Custodial setup Easier compliance with changing regulations

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Adoption Issues & Perceptions eRecording Security & Privacy Legal Complexity Lack of Integrated, Seamless Solutions Consumer Adoption Industry Standards Lack of Internal Priority (or clear ROI) From 2006 Fannie Mae industry survey

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA MISMO – PRIA – SPeRS – MERS – Resources

MISMO Trimester Meeting June 4 - 7, 2012 Santa Ana, CA Harry Gardner President SigniaDocs 25 Questions?