The Mortgage Industry Standards Maintenance Organization (MISMO) is targeting January 2025 as the release window for reverse mortgage standards from its work group that is analyzing and developing the standards, according to a statement released Tuesday by Mortgage Cadence.
“Interestingly, traditional forward mortgage lenders are beginning to take notice of the reverse mortgage opportunity, albeit cautiously,” the informational blog posted reads. “There’s a growing curiosity about integrating reverse mortgage capabilities into existing lending platforms. Questions about data portability and system integration are becoming more common, indicating a shift in perspective among conventional lenders.”
This interest aligns with efforts designed to standardize reverse mortgage data, the company noted. It also characterized the standards more fully, saying they could go a long way in making reverse mortgages more of a mainstream financial product than they are today.
“This landmark development will establish uniform data standards for reverse mortgages, potentially opening the door for wider adoption and integration across the lending industry,” according to the Mortgage Cadence post. “It addresses a long-standing challenge in the industry — the lack of standardized data formats that has historically made it difficult for traditional lenders to incorporate reverse mortgages into their existing systems.”
The hope is that these standards will enable any lender, vendor or other party “in the loan manufacturing ecosystem interested in entering the reverse mortgage space to do so with greater ease and efficiency,” the company said.
MISMO launched its reverse mortgage working group in April 2023. It initiated a discovery phase by identifying professionals to join, analyzed reverse mortgage use cases, and evaluated existing MISMO products and tools that could be applied to reverse mortgages.
Earlier this year, the MISMO reverse working group appointed industry veteran George Morales, the national sales director for Mortgage Cadence, to serve as its chairperson. In an interview shortly after his appointment to the role, Morales told RMD about the hopes for the working group.
“This reverse mortgage reference model would go a long way to ‘mainstream’ the reverse mortgage products — which are often seen as niche — by providing opportunities for systems, data and documents in an industry-standard format (with data definitions), to be easily and consistently exchanged between all parties involved in the lending life cycle by both forward and reverse mortgage lenders, vendors and other third parties,” Morales said in July.
Part of this includes lowering the barrier to entry for new players in the reverse mortgage space. This may also include broadening the language used by industry professionals, which is sometimes out of sync when compared to language used on the forward side of the mortgage business, Morales said.
“Creating a MISMO standard that includes reverse mortgages will help in mainstreaming the reverse mortgage product,” he said in July. “It will enable us to bring it to forward mortgage companies, third-party vendors and organizations that interact in the mortgage world, allowing for the exchange of reverse mortgage information between systems.”
Late last year, the Mortgage Bankers Association (MBA) signaled that it was more interested in reverse mortgage activity in 2024.
“I think that given the demographics of this country and given the record levels of home equity, it makes perfect sense for our members to focus on that product, [and to] make it as strong and sustainable, both for lenders and servicers and of course for the homeowners and their families, as it can be,” MBA president and CEO Bob Broeksmit said at the time.
