MISMO® Seeks Input on Standardized Dataset for Private Label Mortgage Assets

CONTACT
Adam De Scantis
adesanctis@mba.org
(202) 557- 2727

WASHINGTON, D.C. (October 11, 2018) - MISMO, the mortgage industry's standards organization, is seeking participants to define a standardized mortgage asset dataset to support rating agency asset valuation efforts necessary for securitizing residential mortgages. Those interested in collaborating with MISMO are invited to join MISMO's new Private Label RMBS Valuation Workgroup, which will be responsible for defining and implementing a standard dataset and related materials for use in grading publicly-traded private label mortgage-backed securities.

"A confluence of factors has contributed to significant changes in the RMBS market over the past decade. However, data standards for grading mortgage securities have not evolved uniformly over this period, creating inefficiencies and confusion in the market," said Michael Franco, Chief Executive Officer of American Mortgage Consultants, Inc., a MISMO Strategic Planning Committee Member and provider of mortgage due diligence and consulting services. "This important initiative serves to further advance the industry by bringing participants together to create a well-defined and consistent dataset that aligns private label and non-private label securitization data exchanges. We believe these alignment efforts will create greater efficiencies for originators and aggregators that will benefit the overall housing economy."

To help investors evaluate the quality of mortgage assets, rating agencies assign risk grades to loans based on the exceptions and conditions uncovered after closing by third party review firms. Currently, mortgage asset data is delivered to rating agencies in an older format required by all rating agencies. The current format is out of date and no longer maintained leading to supplemental data requirements that vary in format in content between rating agencies and third-party review firms.

By creating an up to date, well defined standardized mortgage asset dataset, MISMO will help enable rating agencies to grade mortgage assets more precisely and produce a smoother, more efficient securitization process.

By joining the MISMO Private Label RMBS Valuation Workgroup, participants will be able to access resources and expertise on implementing newly created standards for grading mortgage assets.

Specifically, the Private Label RMBS Valuation Workgroup will be responsible for:

  • Documenting the data requirements associated with the rating agency RMBS mortgage asset valuation requirements;
  • Identifying and solving any gaps between MISMO standards and existing standards used by the rating agencies; and
  • Finalizing and publishing MISMO standards for rating agency RMBS reporting requirements

Those interested in participating in this collaborative, industry-wide effort should send an email titled "Join MISMO PLS RMBS Group" to info@mismo.org by October 31, 2018. More information on this industry-wide effort is available here.