Written by Erin Bittenbender
With over 350 online and in-person attendees and representatives from over 115 companies, the MISMOFall Summit 2024 was packed with insights on market conditions, credit modernization efforts, a preview of MISMO Link™, artificial intelligence and so much more. Let’s dive into our key takeaways from the event.
MBA Forecasts / Numbers
We heard from MBA economists about the outlook for the mortgage industry. Here are some of the highlights:
- Interest rates are dropping, expect at least 2 rate cuts in 2024 and more in 2025
- Independent Mortgage Banks (IMBs) experience first profit in Q2 2024 after a record-breaking 8 consecutive quarters of pre-tax net production income losses
- Market will remain primarily purchases for the foreseeable future due to lack of motivation for many existing homeowners who have a sub 3% interest rate
- Origination volume bottomed out in 2023, is now increasing slightly, and expect continued increases through 2026
- Huge opportunity in home equity (upwards of $19 trillion in tappable home equity)
- Housing appreciation will continue but likely at a slower pace
- Technology investment continues to rise with security being a large factor
MISMO Link™
Attendees were able to get their first look at MISMO Link™ which is expected to evolve and significantly improve the process of building data standards. Link™ , which will house MISMO Reference Model versions 3.0 – 3.6, provides a platform to build datasets and enables generation of various MISMO artifacts. This new tool will enhance the quality, consistency, and time to market by reducing opportunities for human error. MISMO expects to provide access to MISMO Link™ for the member community in Q4 2024.
Artificial Intelligence
PhoenixTeam participated in a MISMO AI session moderated by Tela Mathias featuring Felipe Millon, Martin Stanley, and Steve Holden, to discuss the practical implications of bringing Generative AI (GenAI) into organizations. GenAI capabilities are rapidly expanding with new use cases emerging. The session helped mortgage companies and partners learn how to integrate GenAI effectively and the essential questions to ask when introducing GenAI into your organization. Learn more by visiting these resources:
Panelists from, “AI in Mortgage: Legally Speaking provided an interesting update on the legislative and regulatory activity associated with AI. In 2024, 36 out of 50 U.S. states introduced AI legislation. Colorado became the first state to enact law with direct impact to mortgage processes with SB 24-205 Consumer Protections for Artificial Intelligencewhich regulates the use of “high-risk artificial intelligence systems,” which is AI used to make, or be a substantial factor in making, a consequential decision. Housing and credit decisions are considered “consequential decisions”. California and the District of Columbia have AI legislation in process and 8 states introduced legislation that failed.
The MBA provides a great resource for tracking AI laws introduced at the state level, check it out here.
Credit Modernization
Panelists from “Evaluating Readiness: Next Steps in the Required Credit Score Change Process” stressed the need for companies to evaluate their key stakeholders to assess impacts of the broad reaching changes of the FHFA required credit scoring changes. The changes will be significantly more complex than a simple exercise to remove one type of credit score and replace it with another. There is still guidance needed from the CFPB on completion of the Credit Score Disclosures and Adverse Action Notices.
Industry participants are still waiting to see whether the federal government housing agencies (FHA, USDA, VA) will follow FHFA’s lead on the credit changes. Finally, the Credit Reporting CoP continues to refine their guidance to support the industry’s implementation of the FHFA / GSE credit report changes and is seeking feedback from the MISMO communityby the end of September.
Lender Forum
MISMO hosted an inaugural Lender Forum (invite only) which provided an opportunity for lenders of all sizes to gather to discuss challenges specific to business, operational, and implementation issues facing the mortgage industry. This critical feedback enables MISMO to identify opportunities for data standardization. Feedback on this session was positive and we hope to see it on the agenda for the Winter Summit.
Elections for CoPs
Looking to get more involved in MISMO? The annual MISMO Community of Practice election season will be kicking off in a few short weeks. Consider submitting your Community of Practice nomination to serve in one of the following positions: Chair, Vice Chair, Information Management Representative, Architecture Representative or Education Representative. The positions are held for a 1-year term and are reserved for representatives from MISMO member companies. Be on the lookout for more information from MISMO!
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The MISMO Fall Summit underscored the pivotal role that MISMO standards play in advancing the mortgage industry. Continued collaboration and education among industry stakeholders is essential to realizing the full potential of these standards, ensuring a more streamlined and effective mortgage ecosystem for all.
Interested in attending the Winter Summit? Mark your calendars: January 13th to the 16th in Sandestin, FL.
