I had to look it up because I saw "vermi" and thought "vermin," as in mice or rats. Turns out it's what I've always known as just "composting." My parents have been doing that since before I was born. They'll take some concrete blocks or something, make the outer edges of a box/pen, then use that for the compost pile... the worms probably come up from the ground since the pen doesn't have a bottom other than the ground. They take coffee grounds, banana peels, egg shells, etc and dump it on the compost pile, which is also where greenwaste (grass clippings, etc.) goes. The worms break all that down, and then it gets used for fertilizer. When my dad tills the garden for the first time of the year, he'll till it once, then spread the compost over all of it, then till it again. I don't remember if they add any more compost over the course of the year or not.
If you were to do a self-enclosed setup in the mudroom, you'd probably have to buy worms or something because if worms can get in naturally, something's wrong. Also, I'd imagine sometimes the smell's not that great, although since the pile was always outside it was never an issue. But I imagine making a compost pile outside would violate some HOA rules.