MISMO Software Compliance Certification Program Brown Bag

1. MISMO Software Compliance Certification Program Brown Bag Jan Davis Mary Ann Francis January 14, 2014 The MISMO Winter 2014 Summit Education Program is sponsored by:

2. Program Status and History The Pilot Certification Program is underway!!! • Feasibility Analysis and Business Case completed in May 2013 (Phase 1) • Program design work began at the end of June 2013 (Phase 2a) • Program development was approved August 15 (Phase 2B) • Feedback was collected throughout the process from multiple audiences including vendors, lenders, MISMO GC members, Board members, GSEs, and others. Feedback was consistent and supportive. • The team designed and developed a two level program for certifying companies and their software and tools for use of the MISMO standards within a specific business domain. • Pilot Program (Phase 3) began in late November 2013 • Transition to a broader roll-out is targeted for Spring 2014

3. Program Design Overview MISMO will offer two levels of certification The objective of the assessment is to evaluate how the MISMO standard for a specified software product has been applied within a particular business domain.

4. Comparison of Level Requirements

5. Program Design Concepts • Certification always includes a review of the company’s MISMO-related practices. Additional components of the certification process include reviews of product or component use of MISMO against appropriate portions of the Reference Model within the identified domain. • In general both Standard and Premiere Levels require certification of the following: • Certification of company policies and practices as related to MISMO. • Certification of appropriate use of the MISMO schema and logical data dictionary for specified business domains. • Certification of software or tool and proof of capability to store and/or create MISMO oriented data transmissions, interfaces, or reports. • Premiere Level also requires certification of MISMO-related education policies and practices

6. Premiere Level Review - Example • What might an example premiere level review include? • Apply for certification • Identify and contract an Authorized Assessor for the review • Review and decide upon applicable certification business domain • Pre-review meeting with Authorized Assessor • Agree on test case scenarios • Confirm list of artifacts needed for review • Authorized Assessor to complete on-site certification review • Interview key personnel • Review artifacts • Complete testing of agreed upon test cases • Remediation, if required for certification • Certification report recommendation provided to MISMO Mgr • Notification of Certification

7. Compliance Program Value Proposition Use of MISMO standards reduces processing costs, increases transparency, and boosts investor confidence in mortgages as an asset class. Participation in a MISMO software certification program will facilitate market and regulatory differentiation and enhance the value of the standard. Recognized compliance offers Benefits of participation include Ability to license “MISMO compliant” service mark Vendor listing on MISMO.org Vendor listing in MBA Buyer’s Guide (MBA members) Other MBA/MISMO recognition Streamlined regulatory compliance Streamlined Agency interaction (GSEs, GNMA, CFPB, etc.) • Public recognition • Brand differentiation • Preferred vendor status • Attraction as an integration partner • Improved internal operational processes • Known status against MISMO objectives • Enhanced release planning for MISMO utilization • Technical documentation of MISMO testing

8. Benefits accrue as certification level rises Standard Level Premiere Level Use of MISMO Premiere Level Certification mark for specific Domains which represents the highest level of Certification. Provides immediate visibility and market recognition for advanced assessment and participation Enhances ability to stay in step with MISMO changes Expert Independent assessment of compliance and testing of internal procedures Technical as well as policy assessment Associated knowledge transfer from Assessor Best practices sharing from Assessor • Use of MISMO Standard Level Certification mark for specific Domains • Allows for gradual progress toward Level 2 certification • Provides immediate visibility and market recognition for MISMO participation, engagement, and use • Enhances ability to stay in step with MISMO changes

9. Service Marks have significant content MISMO Version Levels Domain Potential Future Level

10. Business Domain Certification Options Business Domains will be granular. Compliance will be certified and certification marks awarded at the domain level. MISMO Residential Appraisal Origination Real Estate Services Secondary Servicing Mortgage Business Process Credit Loan Delivery Closing Appraisal Performing Loans AUS Loss Mitigation Product and Pricing Domains and Service Marks Application Default All others included Notional Domains Servicing Transfers Applicant will provide test cases to demonstrate compliance within a domain. MISMO will provide example test cases for each domain.

11. Many Domains will be available Applicants will apply for certification of a software module, component, or tool to a specific business domain.

12. Many Domains will be available Applicants will apply for certification of a software module, component, or tool to a specific business domain.

13. Domain compliance means: • The software or tool uses the features, approaches and data available in v.3.x. Use of v3.x is expected. Use of alternate versions must be explained (e.g., use of 2.x is supported but must be explained). • Published MISMO Implementation Guides (I-Guides) will serve as the benchmark for “conformity” where available and applicable. • It is expected that compliance evidence and test cases demonstrate v3.x changes and extensions (if extensions have been made) • For domains and business/test cases where extensions from 2.x exist, use of 3.x changes and extensions is expected • Use of both the MISMO XML Schema and Logical Data Dictionary standards and definitions are expected

14. Program Pricing • A volume discount will be available for certification marks within the same product line. Application fees for the third and subsequent marks within the same product line will be discounted by 50%. • Program prices subject to change as work continues to vet pricing with potential participants.

15. Pilot Considerations Some Pilot participants have been identified but there is room for more! Pilot Objectives Pilot Selection Criteria Incentives • MISMO subscriber/ leadership • Existing integration partners, both GSEs, Ginnie Mae, and vendors • Mortgage Industry recognition for quality or innovation • Have staff and management available in the Pilot timeframe • Can demonstrate commitment to complete pilot effort in timeframe • In concert with MISMO partners, test, evaluate, adjust program processes and content • Test, evaluate, adjust program materials • Establish credibility through process refinement and quality service • Create positive program buzz and case studies through successful implementation • Early view of program • Ability to influence program • First listings and recognition in promotions • MISMO-led guidance in processes • Conference panel slot to discuss • First to gain all program benefits

16. MISMO solicited participants in the Pilot Program through announcements in Industry Publications Pilot Program Participants Authorized Assessor Applicants Premiere Level Applicants Standard Level Applicants • ActualizeConsulting has been approved to be an Authorized Assessor and is available to discuss the program • CAPCO is working on their application for authorization to be an assessor as part of the Pilot • Three companies plan to apply for Premiere level certification in the Pilot Program run so far • MISMO is looking for Pilot candidates for Standard Level certification. Please contact Jan Davis or Mary Ann Francis for more information.

17. How to Participate • Remember—Certification is HELPFUL to your organization’s MISMO, Data, and Marketing strategies • Materials for all program levels are available including • Program Overview • Standard and Premiere Level Process Guidance • Draft Contractual Agreements (Standard contact still being finalized but very similar to Premiere Agreement) • Pricing Sheet • Complete a preliminary application and conduct an initial call with the MISMO operations team to discuss your application, the domain(s), and the process to become certified. • Provide the legal agreements to your legal team for preliminary review as soon as possible. This will ensure that your application can be processed quickly once you decide to apply for certification and conduct the technical assessment process. • Look for more announcements soon, especially at the MBA Tech Conference in March. A special presentation will be conducted on Friday March 21 at MBA Tech.

18. THANK YOU! • For more information or to provide additional thoughts or ideas contact the project team • A new website will soon be available providing downloadable Program materials. Announcements will be made through the All MISMO listserv and NewsLink. Contacts: Jan Davis Jdavis@mba.org Mary Ann Francis mafrancis@cox.net

19. Thank You to our 2014 Winter Summit Primary Event Sponsor