Mid America Mortgage in Addison, Texas, will begin purchasing electronically closed loans through its correspondent lending channel.
Jeff Bode, Mid America's chief executive and owner, said the decision to accept e-notes is part of an effort to incentivize wider adoption of electronic closing, particularly through a secondary market channel for these loans.
"After implementing e-closings and e-notes in our retail channel, we immediately saw their potential to improve liquidity for smaller market players, especially brokers seeking to transition into mortgage banking," Bode said in a news release Thursday.
"By utilizing e-closings and e-notes, lenders can decrease turn times on their warehouse line to 48 hours or less, which, in turn, reduces the amount of per-loan interest and fees they are charged by the warehouse bank."
To be eligible for purchase by Mid America, loans must be in approved status. Loans must be submitted to Mid America for credit and compliance approval before closing to complete the purchase wire within a day or two of closing. If a loan is closed prior to Mid America's review, it will go through a normal correspondent review.
Mid America noted that it has established relationships with warehouse bank providers of electronic notes, including FirstFunding and Merchants Bank of Indiana, in an effort to provide further confidence to participating lenders.
The company also released a list of preferred e-closing and e-note vendors, featuring Digital Delivery eSign, DocMagic, International Document Services and Pavaso. Mid America said, though, that any vendor can be used.