Freddie Mac Gives Nod to 4 eMortgage Vendors

December 1, 2016

For home shoppers who prefer a more digital mortgage process, mortgage giant Freddie Mac has published a report with a list of companies that meet its requirements for eMortgages, including for creating, signing, and storing electronic promissory notes.

Freddie Mac first began purchasing eMortgages from sellers and servicers in 2005. The government-sponsored enterprise now regularly accepts electronic documents used in initial disclosures and electronic closings, such as loan applications and IRS forms.

“A number of factors are driving interest in eMortgages, including borrower demands for better, faster, more reliable service, and lenders’ desire to save costs in the loan application process,” says Samuel E. Oliver III, vice president of transformation management for the Single-Family Business at Freddie Mac. “We’re doing what we can to create a more efficient system.”

Freddie Mac says the following four companies have completed its approval process and meet the technical requirements to create, sign and store eNotes (which are the repayment obligation between the borrower and the lender): 

  • Digital Delivery
  • eSign Systems
  • Fiserv
  • Pavaso

Two additional companies – DocMagic and eOriginal – have pending approvals as they continue to undergo Freddie Mac’s full review process.

"The eNote is a critical document that needs to meet the 'transferable record' requirements of electronic transactions laws. In other words, it has to be a single, unique, unaltered, authoritative copy and there are special technology requirements that the mortgage industry has designed to comply with these requirements," Oliver says. "Whether sellers build, buy or license it, the system must facilitate the creation, signing, transfer and storage of the eNote to comply with these requirements. That's why we took the extraordinary step of publishing this list of approved vendors."

Still, the growth of eMortgages has been relatively constrained, according to a survey conducted by Freddie Mac and Fannie Mae earlier this year. Warehouse lenders say that consumers have not been asking for eNotes, and technology costs remain high, which is limiting the return on investment at the current volume.

Source: Freddie Mac and “Freddie Mac Releases List of Approved E-Mortgage Vendors,” National Mortgage News (Nov. 29, 2016)