Data Standards and Appraising

Elizabeth Green
Elizabeth Green, Chief Data and Product Solutions Officer at LoanLogics

STANDARDS – A PRIMER

Standards are everywhere, and while we benefit from them, they are often unnoticed or assumed. There are many types of standards, ranging from standards in practices to standards in measuring performance to describing units of measure applied to that which is to be measured. There are standards in manufacturing and in data definitions and electronic protocols. And, of course, there are standards in commerce that define the value of goods and currencies.

In this article, I will explore the multi-faceted world of data standards.

Professional Standards

Standards like Uniform Standards of Professional Appraisal Practice (USPAP) define processes, protocols, and considerations that appraisers should follow in order to ensure compliance with how their work is viewed and judged by licensing authorities, peers, and clients. Ethical standards and best practices exist in many professions for similar reasons, examples include attorneys, accountants, and physicians.

Types of Standards

Many standards are defined and maintained by professional associations and recognized by authorities.  Some standards are available free of charge, but certifications may carry a fee. Some standards are licensed for use and require an annual fee.

Standards for cataloging or identifying things, people, certifications, and real property exist everywhere. While some are widely adopted and recognized, like the Social Security Number, others are not federally mandated in terms of format or content. For example, land records are maintained jurisdictionally. While there are similarities in practice, there is no federal standard for the format of a legal description or an assessor’s parcel number.

Many standards are defined as an “Open Standard” which implies the standard is publicly available and the standard is governed by a formalized organization, usually of interested parties who develop the standard by consensus. Typically, the publishing organization enforces strict anti-trust and intellectual property policies put in place to ensure the standard is not encumbered by copyright claims. Open standards encourage innovation, with advances in technology and data access made rapidly available to users.

The term “Open Standard” is not to be confused with “Open Data” which speaks to the nature of the data’s use and availability – specifically free to use, re-use, and distribute without restriction, in terms of use or cost. A key example of open data in action is Data.gov.

It is also important to understand that standards are not always free for use. While standards organizations are typically chartered as not-for-profit, the participation in the standards organization usually requires membership fees. Attending conferences and meetings usually require a fee to the organization. While all standards usually have a license and terms of use, not all standards are free of charge to use. Most often, the costs are borne by the manufacturer or software provider and rolled into operational costs which are offset in the pricing of the product to the client/user.

Several Leading Standards Organizations

American National Standards Institute (ANSI) has coordinated the development of voluntary consensus standards in the United States. ANSI does not write standards; rather, the Institute accredits standards developers that will establish consensus among qualified groups. Its guiding principles, “consensus, due process, and openness,” are followed by the 220 distinct entities currently accredited to develop and maintain nearly 10,000 American National Standards (ANS). Though all ANS are developed as voluntary documents, U.S. federal, state, or local bodies are increasingly referring to ANS for regulatory or procurement purposes. Many ANS are also national adoptions of globally relevant international standards.

OSCRE International is a collaboration of organizations and individuals focused on the development and implementation of real estate data standards. For more than 15 years, it has been committed to build high performance organizations, bringing digital information together from multiple sources and platforms.

Real Estate Standards Organization (RESO) creates open standards that drive innovation in real estate technology. RESO’s 800+ member organizations collaboratively develop and implement these standards to create efficiency: faster software development and integrations, scalable tools that cross marketplaces, and more accurate, robust, and informative data. RESO’s member organizations include REALTOR® associations, multiple-listing services, brokerages, trade organizations, and industry technology partners. ** Upon RESO’s incorporation as an independent non-profit entity, the National Association of Realtors (NAR) became the sole Class A member.

Mortgage Industry Standards Maintenance Organization (MISMO) the standards development body for the mortgage industry. MISMO developed a common language for exchanging information for the mortgage finance industry. Today, MISMO standards are accepted and deployed by every type of entity involved in creating mortgages, and they are required by most regulators, housing agencies, and the GSEs that participate in the industry. Use of MISMO’s standards has been found to lower per loan costs, improve margins, reduce errors, and speed up the loan process by reducing manual, paper-based processes while creating cost savings for the consumer.

MISMO standards are grounded in an open process to develop, promote, and maintain voluntary consensus-based standards. They allow participants in the mortgage industry, such as mortgage lenders, investors in real estate and mortgages, servicers, industry vendors, borrowers, and other parties to exchange information more securely, efficiently, and economically. ** MISMO is a wholly owned subsidiary of the Mortgage Bankers Association.

Open Geospatial Consortium (OGC) is an international consortium of more than 510 businesses, government agencies, research organizations, and universities driven to make geospatial (location) information and services FAIR – Findable, Accessible, Interoperable, and Reusable.

OGC’s member-driven consensus process creates royalty free, publicly available, open geospatial standards. Existing at the cutting edge, OGC actively analyzes and anticipates emerging tech trends, and runs an agile, collaborative Research and Development (R&D) lab – the OGC Innovation Program – that builds and tests innovative prototype solutions to members’ use cases.

The Appraisal Foundation sets the Congressionally authorized standards and qualifications for real estate appraisers as well as qualifications for personal property appraisers. It provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals in the United States.

Conclusion

Standards are everywhere and are vital to commerce and information exchange.  As we rely more and more on digital commerce and analytics, standards in data become absolutely critical.  Involvement in the development of standards is a civic duty that contributes to the overall effectiveness of how valuation and real property information is communicated and utilized in meaningful and valuable ways.

Have any comments or would you like to submit content of your own? Email  comments@appraisalbuzz.com.

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About Elizabeth Green

Elizabeth Green
Elizabeth Green is Chief Data and Product Solutions Officer at LoanLogics. In this role, she is responsible for the development of the company’s solutions and data strategy, as well as expansion of products, including in the area of collateral risk assessment. Elizabeth is a strategist, solutions architect, speaker and valuation advocate. As a recognized mortgage technology veteran in software product leadership for solutions in residential property valuation, loan origination, mortgage servicing and secondary marketing, she has helped to foster a new level of understanding in credit and collateral risk assessment through the application of digital intelligence. Elizabeth is a 25-year veteran leader in the mortgage software and valuation sectors. She has been a leader in several standards organizations including MISMO and has a deep history of defining and applying data standards in practical use.  She is the Chairperson of the new Standards Committee for the Collateral Risk Network (CRN).

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