The new president of the Mortgage Industry Standards Maintenance Organization is a 35-year veteran of home lending, and is excited to give back to the industry by bringing together various stakeholders to implement standards. That includes big issues such as the Mortgage Compliance Dataset to make regulation easier, and rapidly proliferating artificial intelligence. 

"We're at this really interesting crossroads in our industry, especially when you think about how fast AI is impacting every line of business," Vieaux told National Mortgage News. "MISMO is uniquely positioned to help industry with AI specifically."

The MISMO leader is also calling on lenders, vendors, compliance professionals and regulators to take part in an upcoming December tech sprint with the Conference of State Bank Supervisors. Over 400 attendees will collaborate on how to implement critical compliance standards, and they'll refine those together at MISMO's Winter Summit in January. 

"Every lender should have an interest in this initiative," said Vieaux. 

The former FinLocker leader shared with NMN his vision for the organization, the general challenges of implementing standards, whether we're in an AI bubble, and more. 

This conversation has been edited for clarity and length. 

What is your vision for MISMO?

Vieaux: In the near term my priorities are centered around awareness, adoption and alignment. 

When I think about awareness, I think of my own understanding of the value proposition of MISMO. When I was a lender, I didn't have a complete appreciation for the value and impact MISMO had on my organization. There's probably a lot of the industry that is in a similar boat. 

MISMO is a community-based organization that comes together to solve problems identified by the industry and it's made up of volunteers that put in their time, resources and expertise into crafting solutions. So I think about giving more people more visibility into the power of MISMO. 

You'll see us show up a lot more, focused on telling the industry in very specific terms and use cases how MISMO has created solutions that already benefit the industry, but equally important involved in initiatives that are going to shape the future of industry.

The community creates these standards or tools. Nobody gets the benefit unless they actually use them. Awareness is helping drive more adoption. When we build awareness and increase adoption, it makes it easier to have conversations with companies about membership, which is how MISMO is funded.

And alignment is not just between lenders and vendors. It's lenders, vendors, the GSEs, agencies and regulators. Part of the beauty of MISMO is when a problem is identified, we bring people together to create solutions including lenders, technology, service providers, vendors, agencies and regulators. 

When you bring all of the ecosystem together to solve a problem, imagine the power of the output. What gets created as a result is something that's impactful, sustainable, and creates transparency across the industry.

What are some specific MISMO initiatives of particular importance to the industry?

Vieaux: There's the mortgage compliance dataset [MCD]. That was created with all those constituents, including regulators. Next on the docket is how the industry and regulators leverage the MCD at the state level as mortgage companies are audited.

Imagine a mortgage company that's licensed in 10 states and gets audited by each of them. To date, for the most part, each of those states has its own set of data requirements. As a mortgage company I have to have somebody on staff to compile these data requests. Fast forward to the creation and adoption of the MCD. Now I as a mortgage company can create one file that can be reused across multiple state regulators. That's an example of how the process works.

Coming up soon is the MISMO and CSBS joint virtual tech sprint on December 3. It's free and you don't have to be a member of MISMO. We already have over 400 registered for this event, which is a mix of lenders, technology vendors, compliance professionals and regulators. 

The tech sprint is going to be focused on how to implement and adopt this MCD as a lender, as a tech vendor and as a regulator, with all the parties at the table together. Then there's the MISMO Winter Summit. We're going to host a workshop to further refine the work of the tech sprint. Then the CSBS has their summit in March, and there'll be presentations on the work that gets created through these sessions.

When I think about the tangible impact that lenders, vendors and regulators can receive from the work of MISMO, this is a perfect example of that. Every lender should have an interest in this initiative.

What are the general challenges of implementing industrywide standards?

Vieaux: Adoption of any product can be a challenge. If I look at the historical adoption of MISMO standards when a standard was made mandatory by say Fannie Mae or Freddie Mac, adoption looks a lot different than when it's not. 

This is why it's so important that we continue to build better awareness of not just MISMO but of all the standards that it created. Part of that awareness needs to be intentional about specifying where the value is, where the ROI is. Absent a mandate from a regulator, the only other things that will compel a company to adopt is tangible value, benefit, maybe risk avoidance. 

What are your thoughts on implementing AI standards?

Vieaux: One of the big concerns from industry right now as it relates to AI, both California and Colorado have enacted some AI legislation. One thing that's missing in their regulation is a clear definition of AI. 

If you think about automated underwriting, which has been around for decades, it's kind of AI. Absent a clear definition on "AI," as a lender you could be at risk from an audit and regulatory perspective based on how your particular state interprets what's AI. 

That's another example of how MISMO can help. Not to just create a set of standards that represent responsible use of AI, but also bring regulators to help us define how mortgage companies and vendors are going to be audited and regulated as it relates to AI.

We might still be in the first inning as it relates to AI in the mortgage industry. So now is the time to get a cross-section of industry together and work on defining not just guardrails, but literally defining what is and what isn't AI.

Do you think there's an AI bubble?

Vieaux: When I hear "bubble" I tend to think of investment, how much money is flowing into versus what's going to be the expected ROI on that investment. 

I think more in terms of how AI is changing how work gets done today. I came from a small fintech and just in the last eight months, that small team has been able to double its output from a development perspective by leveraging AI tools. The tools aren't doing the work, they're scaling the amount of work that the humans can get done inside of FinLocker, as an example. 

I don't see that as creating a bubble and bust. I think it's going to accelerate innovation. We're going to bring things to market faster and test them with real users, because we're able to stand up a prototype so much faster than we were even a year ago. 

We're not putting the genie back in the bottle, right? We're not going to ever go away from AI. I think the bubble talk tends to go around the market side [of the conversation]. But you've definitely seen a lot of big dollars flowing into some interesting companies.

Do you think we're getting closer to AI improving productivity and trimming expenses?

Vieaux: I want to think and believe that. I really do. A big challenge our industry always faces in adopting new technology is risk. Repurchase risk is real. I think we're still so early in the adoption of AI tools that we don't know yet if there's any inherent loan repurchase risk around that. 

I think you'll see adoption, but you'll still see it'll be like a belt and suspenders. Lenders are going to trust but verify. And so at what point will enough lenders feel comfortable that the output from these processes is not only faster and more accurate, but is not creating an increase in loan level repurchase risk?

I do see tactical uses of AI tools that are meaningfully changing cost in a very specific area. If I'm a mortgage company and my help desk has hundreds of questions coming in, with AI tools I can automate maybe 85% to 90% of those responses. So now I don't necessarily have to add another full-time body to that help desk. That doesn't really present a lot of risk to the lender. That's a tactical way to scale. 

I always think of the way you can scale your human capital, and I think that's where we're seeing some of the benefits of AI. Not necessarily replacing humans, but actually scaling the humans you already have on your team.