Ginnie Mae announced a major step in modernizing its platform, allowing so-called “digital collateral” or electronic promissory notes and other loan files as collateral in its securities.
Six weeks after a Ginnie Mae executive said the agency was “just around the corner” from beginning to accept eNotes in its securitizations, Ginnie Mae Principal Executive Vice President Seth Appleton said the program had been launched.
A lender seeking to implement eNotes and electronic loan closings will want to take a series of key steps, including:
- Acquiring or preparing electronic loan closing documents that meet industry and investor standards for electronic presentation and execution
- Selecting and implementing an electronic loan closing platform designed to handle the presentation and execution of eNotes and mortgage loan documents in compliance with applicable law, including the underlying statutes and regulations governing the transaction, ESIGN, and the governing state eCommerce laws
- Selecting and implementing an eVault – a specialized record management system designed to meet the legal requirements associated with owning and transferring eNotes and related documents
- Integrating with the eNote registry owned and operated by MERSCORP Holdings, Inc., which is required by some of the key investors purchasing eNotes, including Fannie Mae and Freddie Mac
- Integrating with a remote online notarization service (if remote closings are planned)
- Communicating with warehouse lenders, investors, and servicers/subservicers concerning plans to move to electronic closings and eNotes
- Identifying and meeting warehouse lender and investor requirements for eNotes and electronically closed loans
- Establishing or contracting for a service to support the filing of electronically executed mortgage documents with government filing offices and
- Educating and training employees on the use of the platform, eVault and services, and on eClosing processes.
There are a wide variety of reference materials available online to support the transition to electronic closings and eNotes. Examples include:
- MERS eRegistry Whitepaper on eNotes, available here.
- MERS eRegistry Integration Guide, available here.
- MBA Remote Online Notarization Surveys, available here.
Freddie Mac and Fannie Mae also have detailed reference and requirements materials available online for lenders using eNotes and electronic closings, available here and here.
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