Tech vendors Merscorp Holdings and eOriginal have developed a suite of tools for small and midsize mortgage lenders to close fully electronic loans.
Those small and midsize lenders typically lack the people and resources to do multiple integrations with different providers of the services need to create an e-note, said Merscorp Chief Operating Officer Brendon Weiss.
"This service is adding the e-note creation, the signing of the note and the management of that note in an e-vault all in one bundle," he said. "We're able to combine the integration to the MERS eRegistry with the integration of this new service, so that there's only one integration that an originator needs to go through in order to generate a note, sign a note, value the note, register the note and manage the note for the life of the loan or for the period of time that originator has control of the note."
The technology behind eNote Solutions comes from eOriginal.
"It is being able to bring all of the value of that e-note both for the originator and the secondary market — whether that be the warehouse lender or the investor — to the masses, so they can get that same benefit that the larger players can get," said Simon Moir, eOriginal senior vice president and general manager of digital mortgage.
Current users of the MERS eRegistry are not the target audience for the new product, Weiss said. Those lenders are already working with an e-vault provider. "We're targeting people who have not yet moved forward with their adoption of e-notes," he said.
Right now e-notes are less than 1% of annual total mortgage production, but it is a growth market. If Quicken Loans' introduction of Rocket Mortgage and the scramble by industry participants to have their own digital mortgage programs was the first step, this is the second phase "around the creation of that digital asset and all of the benefits it gives you from compliance, operational efficiency, borrower experience and capital efficiency," Moir said.
"This is the inflection point here. That is what is being offered to the market through MERS here." This is a new opportunity that provides specific functionality in specific packaging.
MERS will remain vendor agnostic, Weiss said. "Our focus is on insuring that originators and mortgage market participants have available solutions that they want MERS to provide, but meanwhile ensuring all vendors and all participants can integrate with the MERS eRegistry and MERS System regardless of who they partner with."