The Mortgage Industry Standards Maintenance Organization (MISMO) announced Sept. 29 that its taxpayer consent language, used widely across the mortgage industry, has been approved as a new standard for compliance with the Taxpayer First Act.
The legislation, which went into effect at the end of 2019, requires taxpayers to provide consent for the express purpose for which their tax information will be used.
MISMO’s language has been used as a resource by lenders, government-sponsored entities, IRS form 4506-T fulfillment vendors, mortgage insurers, and due diligence firms since its rollout November 2019, the organization said.
The approval as a new standard for compliance comes after wide review from industry organizations, and is now listed in Recommendation status, which is the highest possible maturity level for a MISMO standard, according to MISMO. A Recommendation is a standard that “has been thoroughly reviewed and implemented by a wide range of organizations and industry participants,” MISMO said.
“JPMorgan Chase has implemented the MISMO taxpayer consent language for its retail originations and reviews the loan files it purchases to ensure the MISMO language is included,” Suzanne Fay Garwood, assistant general counsel at JPMorgan Chase, stated in a release. “The MISMO consent language has been successfully integrated into our mortgage origination process and we appreciate the leadership role MISMO took on this.”
MISMO said its goal with its taxpayer consent language was to provide a consistent way for industry organizations to comply with the new requirements of the Taxpayer First Act. Since the enactment of this provision, MISMO’s consent language has been used by a range of players in the mortgage industry, as it allows lenders to share tax information received from the Internal Revenue Service with other parties involved in a transaction, a common practice in the mortgage industry.