By Michael Detwiler

The high rate of technological innovation in the mortgage industry has led to a proliferation of buzzwords that has gotten out of control. Vendors are now feeding these new terms to executives instead of providing solid information about what their tools can actually do. I call this phenomenon "buzzword compliance." In cases where the new technologies do live up to the promises inherent in these catch phrases, it's just a marketing ploy, but in the many cases where they do not perform as expected, it is more akin to fraud.

MISMO compliance is a case in point. The Mortgage Industry Standards Maintenance Organization has probably done more for the advancement of our business than any other industrywide technology initiative to date. Consequently, the term MISMO compliant conjures up images of a world in which all data naturally flow from the systems that create the data to the systems that need the data in a seamless, automated fashion. When this buzzword is uttered, lenders can clearly visualize the future they desperately want to inhabit. It evokes a loud Yes! on the path to a closed technology sale.

Unfortunately, MISMO compliant, in today's environment, is a meaningless phrase. There is no standard for what makes a software application compliant with MISMO. Wisely, MISMO recently spun off a special unit for the purpose of providing a mechanism to certify MISMO interfaces. The first such certification test available is for credit and more certification tests are coming. However, prior to this announcement by MISMO, there was no way to prove that a tool was or was not MISMO compliant.

What a perfect marketing tool. A buzzword that makes the client feel a blissful peace whenever you mention your product that cannot be dispelled because no one knows what the term actually means. No one can know because it has yet to be defined. And yet, a quick glance at the marketing material for the industry's top technology vendors will give you enough examples of this buzzword to wallpaper your office.

In the near future, as MISMO reaches out to vendors and evaluates their offerings, many of these claims will prove to be nothing more sinister than clever marketing. Those firms that are not now and probably won't soon be compliant with MISMO's data standards, yet are making such claims, will be revealed as unethical. Those that sold technology on the basis of these false claims will be guilty of acts that border on the criminal.

Unfortunately, there is no independent body in the works to substantiate claims like end-to-end, fully browser based, enterprisewide, or based on service-oriented architecture. When vendors start throwing these buzzwords around, it will be up to the lender's business and technical executive teams to see through the marketing spin to the real technologies.

The biggest threat here is not that buzzword compliance will hamper business through investments in technology tools that cannot deliver functionality to support a lender's intended business model, though that is happening today and will likely continue. The more serious risk is that improperly applied terminology will slow the adoption of important new technologies, such as the e-mortgage infrastructure that promises to jettison all vestiges of an unwieldy, paper-dependent process.

For instance, service-oriented architecture is one of the most transformative technologies ever embraced by businesses across industries. Our programmers realized early on that by fully understanding and applying this concept, mortgage lenders would gain significant advantages. SOA embeds business logic in an architecturally sound design that can be accessed by other applications and services. It's like opening the doors on your technology and benefiting from outside tools as you see fit. Alas, for many vendors today, SOA is more likely to mean these advantages are so obviously absent.

SOA stands to be misapplied and diluted by vendors, lenders and pundits who don't understand its fundamental principles. In an elaborate bait and switch gambit, some vendors are promising to apply SOA to existing systems in order to secure contracts that will later allow them to fix the problems that they know will inevitably result.

The truth is, legacy systems simply cannot adopt SOA after they have been developed under some other programming methodology. They are wholly unable to distribute business logic in a way that can be accessed by other systems. This inability is built into these systems by design. Some technology vendors believe they can build SOA into these platforms on the fly. Unfortunately, unless SOA is built in from the ground up, this rigging will create an integration nightmare that will soak up resources far in excess of the ROI the new technology was promised to deliver.

One of the greatest hurdles our industry must clear in order to realize its destiny as a powerhouse opportunity for energetic and astute businesspeople is to demand clarity from and hold accountable the vendors that serve it. This means lenders must allocate adequate time and effort to verify the claims of their technology suitors, perhaps through a proof of concept. In addition, they should make vendor marketing material as well as RFI and RFP responses part of the final contract. Vendors that are hesitant to comply with such requests must be viewed with suspicion.

Failing to hold technology vendors accountable for their claims has led to countless horror stories of implementations gone wrong. The fear, uncertainty and doubt propagated by buzzword compliance impedes the adoption of new technologies that are essential for the future of our business. If we continue to do business with vendors that misrepresent or misunderstand their own solutions' authentic capabilities, we'll make very little progress toward adopting industry-best practices, such as those represented by SOA and MISMO.

Open dialogue and debate are the greatest weapons we have to fight the tyranny of buzzword compliance, and so I welcome your comments and feedback.

Michael Detwiler is CEO of Denver-based Mortgage Cadence. Mortgage Cadence produces LOS technology for the mortgage industry and can be found on the Web at http://www.mortgagecadence.com.