eClosing and eMortgage Fact Sheet

Describes how eMortgages and eClosings provide lenders with an efficient and paperless closing process while optimizing funding capabilities and improving execution to enable faster delivery into the secondary market.

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What is an eClosing?

An eClosing is the act of closing a mortgage loan electronically. This occurs through a secure digital environment where some or all of the closing documents are executed and accessed electronically.

This is often a hybrid process in which certain key documents, such as the promissory note and security instrument, may be printed to paper and wet-signed, while other documents are signed electronically.

eClosings result in eMortgages only if the promissory note is signed electronically.

What is an eMortgage?

The term "eMortgage" generally refers to the use of electronic processes and signatures in the mortgage production process. More specifically, it refers to electronically-signed closing documents paired with an original electronic promissory note (eNote) signed on an eClosing platform and registered with the MERS eRegistry® upon execution. The term "eMortgage" is often used to indicate an eNote even though eMortgage is the broader term for the electronic process that includes the eNote and the electronic security instrument.

Benefits of eClosing and eMortgage:

Save time and money

  • Shorten a loan's life cycle, from origination to delivery into the secondary market.
  • Eliminate paper, shipping, and storage fees.
  • Fund faster with the delivery of an eNote.
  • Optimize your use of capital due to faster turn times.

Reduce risk

  • Reduce operational errors.
  • No missing signatures, documents, or files.
  • Improve data quality and validation.

Better borrower experience

  • Borrowers can review loan documents prior to closing.
  • Faster and easier signing process.
  • More informative and efficient than a traditional closing.

Features and Considerations:

  • Key component of a successful digital mortgage strategy.
  • The Fannie Mae Selling Guide permits electronic signatures on most closing documents without approval. If you want to originate, sell, and service eNotes, Fannie Mae approval is required.
  • Available for Whole Loan (a.k.a. Cash Commitment) and Mortgage-Backed Securities (MBS) executions.
  • Check out the Getting Started Guide to transform your business in five easy steps.

To learn more about how your business can implement eMortgages and eClosings, visit Fannie Mae eClosings and eMortgages online at: www.fanniemae.com/singlefamily/emortgage