Fee Standardization Isn’t About Fee Names. It’s About Data.

When I first started talking with people about MISMO’s Fee Modernization work, I noticed a pretty common reaction. “We’re spending time standardizing fee names?” Honestly, I get it. On the surface, it doesn’t sound like one of the biggest issues facing mortgage lending today. We have affordability challenges, AI, regulation, market volatility, shrinking margins…and we’re talking about fee names? But the more I became involved in this work, the more I realized that’s the wrong way to look at it. This really isn’t a project about fee names. It’s a project about data. The fee names just happen to be where the industry can make a meaningful improvement. 

I’ve spent my entire career watching our industry become more connected. Years ago, a lender could operate with a handful of technology partners. Today, a single loan touches dozens of companies before it reaches the secondary market. Loan origination systems, pricing engines, title companies, settlement providers, document providers, quality control firms, investors, servicers…the list keeps growing. Every one of those connections depends on data. When the data is consistent, everything works better. When it isn’t, everyone spends time trying to figure out what the other guy meant. 

That’s exactly what has happened with fees. Two companies can be talking about the exact same fee and call it something completely different. Neither one is necessarily wrong. They’re just using the terminology that evolved inside their own organization or technology platform. For years, we’ve simply learned to live with that. People filled in the gaps. Someone on the operations team knew that one fee really meant another. A phone call got made. An email got exchanged. A spreadsheet got updated. The work eventually got done. But our industry doesn’t operate that way anymore.

Today, information moves between systems far more often than it moves between people. Software doesn’t know that “Electronic Registration Fee,” “MERS Registration,” and “Mortgage Electronic Registration System Fee” might all be referring to the same thing. It simply sees three different values. That’s where the real problem begins. The TRID rule actually brought this issue into much sharper focus. Moving away from HUD-1 line numbers toward consumer-friendly descriptions was absolutely the right thing to do. I don’t think many people would argue otherwise. But it also exposed just how inconsistent fee descriptions had become across the industry.

That’s why MISMO brought together lenders, title companies, settlement providers, investors, technology providers, and other industry participants to tackle the issue. It wasn’t one company trying to impose its terminology on everyone else. It was the industry sitting around the same table asking a simple question: “Can we all agree on a common language?” The answer was yes.

That collaboration resulted in the Consumer Facing Charge and Fee Guide in 2023, standardizing approximately 200 fee names. More recently, the work group came back together to modernize the guide and expand it to reflect today’s market. That’s the part most people know. The part I think deserves even more attention is what sits underneath those names.

A recently published fee modernization white paper spends a significant amount of time talking about something consumers will never see, the underlying data structure. In my opinion, that’s where the real value lives. Here’s why. Imagine a borrower reviewing a Closing Disclosure. Everything looks correct. They see an “Electronic Registration (MERS) Fee.” It’s clearly identified, properly disclosed, and fully compliant. Now imagine what gets transmitted behind the scenes. Instead of identifying that fee using a standardized data element, one system simply labels it as “Other” and drops “MERS Fee” into a free-text description. Nothing changed for the borrower. Everything changed for the data.

Now every downstream system has to interpret what that fee actually represents. Investors have to interpret it. Quality control systems have to interpret it. Secondary market participants have to interpret it. Technology vendors have to map it correctly. Multiply that by thousands of loans every day. That’s where friction comes from. It’s also where unnecessary cost comes from.

The interesting thing is that most organizations don’t intentionally create this problem. Their systems evolved over time. Their internal naming conventions made sense to them. Their technology was built around the way they worked. But when information leaves one company and enters another, those internal conventions become everyone else’s problem. That’s why I believe the data standardization component of this effort is actually more important than the standardized fee names themselves. The names are what consumers recognize. The data is what makes the industry work.

One of the things I’ve learned since joining MISMO is that standards rarely get much attention when they’re working well. People don’t wake up excited to talk about XML schemas or implementation guides. They shouldn’t. Standards aren’t supposed to be exciting. They’re supposed to disappear into the background while everything else works because of them. Think about how much of your day depends on standards you never think about. Wi-Fi. USB. Bluetooth. None of those became successful because people loved the standard itself. They became successful because they made everything connect more easily. Mortgage standards should do exactly the same thing.

That’s one of the reasons you’ll hear me describe MISMO as the infrastructure behind intelligent lending. Infrastructure isn’t glamorous. But without it, nothing scales. I also think this work becomes even more important as artificial intelligence finds its way into more parts of mortgage lending.

Everyone is talking about AI. New products seem to launch every week. Vendors are moving fast. Lenders are experimenting. That’s all good for the industry. AI doesn’t magically fix inconsistent data. If anything, it exposes it. The better the data going in, the better the outcome coming out.

That’s why initiatives like our Business Glossary, LINK AI, MCP, FRAME, and now Fee Modernization all fit together. On the surface, they may look like separate projects. I don’t see them that way. I see them as different pieces of the same strategy. Create trusted standards. Create better data. Make it easier for technology, and increasingly AI, to deliver consistent, reliable results. None of this happens unless the industry moves together. Lenders have a role. Technology providers have a role. Title companies have a role. Settlement providers have a role. Nobody solves this alone. 

Fortunately, that’s how MISMO has always operated. We don’t create standards in a conference room with a handful of people. We bring competitors together. We bring partners together. Sometimes we disagree. Sometimes the discussions are longer than anyone would like. That’s actually a good sign. It means the people who will eventually implement the standards helped build them. That’s how adoption happens.

Will every company implement these standards tomorrow? Of course not. Technology roadmaps don’t work that way. Vendors have priorities. Lenders have competing initiatives. Change takes time. But having a common destination matters.

The white paper we’ve published is more than an explanation of standardized fee names. I think it’s a roadmap for where mortgage data needs to go next. If readers take away only one thing, I hope it’s this: Don’t think of this as a fee naming project. Think of it as another step toward a mortgage industry where information moves between companies with less friction, fewer manual touchpoints, and greater confidence that everyone is speaking the same language. To me, that’s the bigger story.

And I have a feeling it’s the one we’ll still be talking about long after we’ve stopped talking about fee names.

#VieauxPoint