What is an eClosing?
What is an eMortgage?
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An eClosing (electronic closing) takes place when closing documents are signed electronically. Not all documents must be signed electronically, some documents may be printed and signed on paper. Note that eClosings produce eMortgages only if the promissory note is signed electronically. While not all eClosings produce eMortgages, all eMortgages are the product of eClosings.
In an electronic notarization (eNotarization) the signer meets in-person with the closing agent. Most of the closing documents are executed electronically, typically on a laptop or tablet. This method is commonly used for a hybrid model since it allows the borrower to sign in person when needed.
Where legally allowed, a Remote Online Notarization (RON) occurs when the signer connects with the closing agent and notary via a live audio/video conference to execute all closing documents electronically. Since the meeting occurs virtually and all closing documents are executed electronically, there's no travel involved and borrowers can close where and when they want using a computer, tablet or mobile device.
An electronic promissory note. The term "eNote" is often used interchangeably with
An electronic mortgage is created when an electronic promissory note is created and executed during an eClosing, then transferred and stored electronically.
An electronic delivery takes place when an eNote is transmitted to Fannie Mae.
In electronic servicing, a borrower's eMortgage payments and other mortgage services are managed by approved Fannie Mae servicers with full eVault (electronic vault) capabilities. Servicers must identify eNotes in their portfolio. The GSEs have produced an educational aid related to eNote foreclosures for our eMortgage servicers. In the event of a sale of the Mortgage Servicing Rights (MSRs), the servicer must ensure that the new servicer is able to service eNotes.
MERS® eRegistry is an electronic registry that identifies the current Controller (holder) and Location (custodian) of the Authoritative Copy of an eNote. The Controller of an eNote can have the equivalent rights as that of a “Holder in Due Course” of a paper negotiable promissory note if applicable statutory requirements are met. eNotes delivered to Fannie Mae must first be registered by the seller on the MERS eRegistry.
The Mortgage Industry Standards Maintenance Organization (MISMO) provides digital mortgage processes. eNotes must be compliant with MISMO SMART Doc standards.
Choose a Document Provider that can support SMART Docs and integrate with your eClosing solution.
Your LOS must recognize eNotes. Once the eNote is eSigned, the eNote is transferred to your eVault and the closing package moves back to your LOS.
Settlement agents should be familiar with your eClosing platform. eClosings may resemble a hybrid process where certain documents (e.g., security instrument) are printed and wet-signed and then scanned for eRecording.
Your eVault should be able to receive, register, and securely store electronic mortgage documents post-closing and before delivery to us. Your eVault provider must integrate with MERS as well.
Make sure your warehouse bank funds eNotes (i.e., eVault and MERS® eRegistry). For eNotes, we execute an agreement with each warehouse bank in lieu of traditional bailee letters.
The correspondent channels require additional due diligence. Correspondents should be compliant with eMortgage requirements since you retain the Reps and Warrants for those loans.
Since Brokers are using your technology to close loans, they would also leverage your closing documents. The MERS® eRegistry’s broker model simplifies this process.
Servicers must have access to an eVault integrated with the MERS® eRegistry to update any life-of-loan events, such as a payoff.
eMortgage Readiness Checklist