The residential mortgage industry as a whole has seen tremendous growth in 2020 for adoption of electronic loan closings and eNotes. MERSCORP Holdings (“MERS”) reported over 45,000 eNotes registered in the month of August, compared to only 12,360 in August 2019. September continued the trend with over 50,000 eNotes registered. MERS(R) also announced in August that it has partnered with the Federal Home Loan Bank (“FHLBank”) System to facilitate use of the MERS eRegistry so FHLBank members can pledge eNotes as eligible collateral.
The FHLBank System, a member-owned cooperative, is made up of eleven regional FHLBanks which currently serve over 6,900 member financial institutions. The FHLBanks created a common set of core requirements that each system bank will need to approve and adopt in accordance with their own internal processes. Each individual FHLBank has also set its own implementation timeline. FHLBank DesMoine and FHLBank Dallas began accepting eNotes in July, and FHLBank Chicago began accepting eNotes in August. Other FHLBanks are expected to be integrated by the end of the year, or into 2021.
The MERS announcement provides that “to be eligible to submit eNotes, FHLBank member financial institutions will need to work simultaneously with their respective FHLBank and MERS to execute the necessary legal and operational requirements, implement a compliance eVault, and integrate with MERS eRegistry to establish their respective FHLBank as the eligible secured party of eNotes pledged as collateral.” To provide further information, MERS hosted a webinar for FHLB members on September 16, 2020.
DocMagic continues to fully support eClosings and the implementation of eNotes. If you have any additional questions about support for eClosings or to be setup for electronic closings, please contact DocMagic’s eClose Team.
