Ginnie Mae lays out its plan for a digital mortgage pilot

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Ginnie Mae is looking for input on its proposed guidelines for electronic promissory notes and other mortgage documents that it plans to test through a digital collateral pilot.

The request for input is in line with plans Ginnie made last year to conduct a pilot in which digital pools and loan packages cannot contain any traditional paper files.

"This announcement underscores Ginnie Mae's commitment to modernizing its mortgage-backed securities program and platform in order to create a digital mortgage ecosystem, from loan application to securitization, that increases access to credit for many Americans," Angel Hernandez, director of MBS policy and program development, said in a press release. "It will also enhance the integrity of Ginnie Mae collateral by reducing the risk from defects in loan instruments."

Among the requirements in Ginnie's proposal are ones that would require e-notes to be Version 1.02 MISMO Category 1 SMART Docs generated, displayed and signed electronically using a qualified electronic closing system. The electronic documents also would have to be secured by a tamper seal.

Responses to the request for input are due Dec. 1.

Ginnie also recently made plans to start using vendor eOriginal's electronic vault as part of its digital collateral pilot. Fannie Mae also is an eOriginal customer, and Ginnie has said it plans to use digital strategies similar to Fannie's and Freddie Mac's in its pilot.

Ginnie's adoption of digital strategies could go a long way toward advancing their use in the industry, as the majority of U.S. mortgages are packaged and sold to the secondary market in securitizations insured by Ginnie, Fannie or Freddie.

"We view Ginnie Mae's support of e-notes as integral and a key accelerator of digital adoption in the mortgage industry," Brian Madocks, CEO of eOriginal, said in a separate press release.

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Digital mortgages Mortgage technology MBS Data security GSEs eNotes Secondary market Ginnie Mae