Discover the Game-Changing Innovations of the Reverse Mortgage Working Group!

The Mortgage Industry Standards Maintenance Organization, a subsidiary of the Mortgage Bankers Association, is revolutionizing the reverse mortgage industry by introducing uniform technology standards to promote collaboration across the mortgage finance ecosystem.

At the MBA Annual Convention & Expo, Jonathan Kearns, vice president of technology at MISMO, shared insights with HousingWire’s Reverse Mortgage Daily on the group’s progressive work towards standardizing reverse mortgages.

1. Breaking Down the Cocoon: Existing reverse mortgage systems are highly specialized and closed-off, hindering seamless integration with traditional mortgage data. The aim is to establish standardized datasets for reverse mortgages aligning with conventional mortgage information. This integration would empower loan officers to assess both types of mortgages simultaneously, an unprecedented feat due to the current non-standardized nature of reverse mortgage data.
2. Technological Advancements: Initially, a substantial effort was made to identify and incorporate nearly 100 unique data points specific to reverse mortgages absent from traditional mortgages. The group is now formulating a dataset based on the industry loan application dataset (iLAD), tailoring it to various use cases within the reverse mortgage realm. The ultimate goal remains to consolidate reverse mortgage data using the MISMO model, enabling compatibility with traditional mortgages.
3. Challenges and Solutions: The biggest hurdle lies in uniting stakeholders accustomed to operating in silos. MISMO’s role in fostering collaboration is instrumental, emphasizing the importance of universal adoption. Encouragingly, two leading reverse mortgage platforms have recognized the urgency for standardization, underscoring the industry’s readiness for change despite its relative insignificance compared to traditional mortgages’ prevalence.
4. Changing Perceptions: Reverse mortgages grapple with historical stigma, hindering their recognition as a viable financial tool akin to traditional mortgages. Promoting adoption amongst traditional mortgage professionals is crucial to broadening the product’s appeal. Movement Mortgage’s foray into the reverse mortgage space exemplifies the untapped potential of this underutilized market, offering an alternative to the conventional refinance options given prevailing interest rates.
5. Educational Outreach: The process of integrating reverse mortgage professionals into the standardization efforts is underway. Collaborative initiatives with industry groups like NRMLA and communication with key stakeholders ensure a comprehensive rollout plan. Focused efforts on education and advocacy in loan production committee meetings aim to garner support for the standardized datasets.

As progress continues, the target for completing the use case datasets by the end of the year remains on track. Pending approval processes post-completion, the enhanced standardization is poised to reshape the reverse mortgage industry, bridging the gap with traditional mortgage practices.