Ginnie mae ad its first guarantee of a mortgage-backed security backed by digital pools, or loan pools made up entirely of eNotes.
The MBS were loans closed by Rocket Mortgage in December, are issued as of January 1, 2021 and have coupon rates ranging from 2.5% to 3.5%. The total principal value of the digital pools was around $ 24 million.
“The issuance of securities backed by digital pools validates the viability of the securitization model outlined in our digital collateral program and lays the groundwork for wider and faster adoption of digital mortgages,” said Angel Hernandez, Principal from policy and program development to Ginnie Mae, who led the company’s digital warranty program. “This event is the culmination of the efforts of many internal and external stakeholders in our digital initiatives, including issuers, document custodians, warehouse lenders, technology providers and other industry partners. “
Ginnie Mae said she expects to see increased levels of growth in the volume of securitized e-tickets under her MBS program for 2021.
The digital mortgage is no longer a marketing strategy; the use of technology has become critical due to COVID-19 and health risks.
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Ginnie mae launched the pilot program in 2019, allowing the agency to accept eNotes as satisfactory collateral for its mortgage-backed securities.
Last summer, Vice Capital Markets Principal Chris Bennett and Mortgage in Central America CEO Jeff Bode explained the importance of eNote adoption by Ginnie Mae in a comment blog for HousingWire:
“There’s a lot to celebrate about Ginnie Mae’s recent announcement that she will begin accepting eNotes (or digital guarantees) from her approved issuers,” he said. “This decision constitutes a vital source of eNote liquidity which, combined with the acceptance of eNote by Fannie Mae and Freddie mac, is finally tilting the ROI scales in favor of eNote adoption. “
Rocket Mortgage agreed that the housing industry will soon see higher digital mortgage adoption rates, saying Ginnie Mae’s program may even become much more popular by the end of 2021.
“The strategy would be to continue to ensure that the process is sound, that it works well, that consumers enjoy the process, and then to scale it up,” said Bill Banfield, executive vice president of financial markets. from Rocket Mortgage earlier this year. “Ultimately, I think what you’re going to see is that the entire industry is adopting this as a method of closing, because it really is a better customer experience.”
Previously, eNotes could not be used to close VA, FHA, or other loans guaranteed by Ginnie Mae. In fact, experts cite eNotes as the most important factor obstruct the widespread acceptance of remote online notarization – often the last step needed to ensure a fully digital closure.