Recently, MISMO announced that its Mortgage Compliance Dataset (MCD) specification has reached “Candidate Recommendation” status and is ready for industry adoption.  The road has been long to get to this point but the MCD is meant to address a key portion of the regulatory examination burden. 

The Need for MCD

The regulatory examination process has long been challenged by:

• Inconsistent data formats across institutions
• Time-consuming manual data compilation
• High preparation costs
• Risk of errors in data interpretation

The MCD is an industry standard loan data file and will become the preferred method for the state and federal regulators to perform the compliance testing portion of mortgage origination compliance exams. Utilizing the established standards produced by MISMO, including defined data terms and structures, allows users to use the same information used in various data exchanges across the mortgage industry and the mortgage lifecycle that are consistently used today.  This enhances data accuracy, consistency in data and creates processing efficiencies, while providing a standardized process for change management that may be needed over time.  More importantly, this eliminates the need for lenders to maintain custom specifications and extra time to explain the data gaps from one system to another.  

 Key Benefits of the MCD Standard

 For Financial Institutions

• Reduced examination preparation time and costs
• Standardized data submission formats
• More predictable examination processes
• Clearer understanding of requirements

For Regulators

• Consistent data formats across institutions
• Streamlined examination procedures
• Enhanced ability to identify compliance issues
• Improved capability for trend analysis

 Looking Ahead

 The MCD standard represents a significant evolution in regulatory compliance, promising to:

• Set new benchmarks for examination efficiency
• Enable more consistent regulatory oversight
• Reduce compliance costs industry-wide
• Improve the quality of regulatory supervision

Staying ahead of regulatory changes isn’t just a matter of compliance—it’s a strategic advantage. Adopting regulatory standards early can be beneficial for lenders, helping to avoid costly penalties, enhance operational efficiency, and streamline examinations. 

Getting Started - Implementation Consideration 

 Organizations adopting MCD should focus on:

1. Assessing current examination processes and systems
2. Planning necessary technological updates
3. Training staff on new requirements
4. Establishing quality control procedures
5. Testing data output and validation

Industry Leadership in Action

Asurity, a recognized leader in mortgage compliance technology and key contributor to the development of the MCD standard, has announced that its automated compliance platform, RegCheck^®, has already implemented the new standard. In addition, the company is preparing to begin the MISMO certification process, demonstrating its commitment to industry innovation and regulatory efficiency.

Conclusion 

In summary, navigating the regulatory landscape can be daunting, but the benefits of adopting standards early far outweigh the risks of procrastination. Whether you're looking to avoid legal pitfalls, improve efficiency, or build lasting relationships with clients and investors, early compliance positions lenders for success. Partnering with similar-minded technology vendors like RegCheck can vault you leaps and bounds ahead of your competitors, help maintain positive relationships with examiners, and promote good stewardship to stakeholders. 

About the Author 

Michael Jackman, currently a senior advisor for Asurity and Co-Chair of the MISMO’s Mortgage Compliance Dataset (MCD) working group .  Mr. Jackman, formerly CEO of ComplianceEase, is a recognized technology visionary and longtime proponent of mortgage industry data standards. He has held a number of executive leadership roles in the mortgage industry for over 30 years.  

Karol Villavicencio is the Director of RegCheck Operations and Product Management.   With over a decade of residential mortgage experience, she’s held various roles across the loan origination cycle and eventually found a home in the cross-section of technology and mortgage compliance space. As a compliance leader for the RegCheck product, Karol looks to pair the advantages of technology with Asurity’s extensive domain expertise to reduce the burden of manual checks and increase visibility to the compliance health of an entity. Karol has taken on a leadership role in the creation of MISMO’s Mortgage Compliance Dataset (MCD). 

Did You Know?

RegCheck^®, Asurity’s automated mortgage compliance solution, allows lenders to detect mortgage compliance issues in real time, saving lenders valuable time and money. Financial institutions interested in learning more about the MCD standard or exploring how RegCheck can streamline their regulatory examination process are encouraged to contact Asurity at info@Asurity.com