Freddie Mac has published a list of companies that meet its requirements regarding the creation, signing and storage of electronic promissory notes.
Four companies — Digital Delivery, Fiserv, Pavaso and DocMagic subsidiary eSign Systems — have completed the full approval process and meet the requirements to create, sign and/or store e-notes. DocMagic and eOriginal have also been granted provisional approvals as they complete the full review process, Freddie Mac said Tuesday.
Freddie Mac is hardly a stranger to e-notes. The government-sponsored enterprise has been purchasing e-mortgages from seller/servicers since 2005. While Freddie Mac actively purchases e-mortgages, e-notes are still subject to specific requirements.
“The e-note…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,” Samuel E. Oliver III, vice president of transformation management for Freddie Mac’s single-family business, said in a news release.
“Whether sellers build, buy or license it, the system must facilitate the creation, signing, transfer and storage of the e-note to comply with these requirements. That’s why we took the extraordinary step of publishing this list of approved vendors.”
Freddie Mac chose to publish the approved vendors list as a way of facilitating the use of digital documents by sellers to streamline and to expedite the mortgage process, said Lisa Tibbitts, Freddie Mac’s director of public relations.
The adoption of e-mortgages has been constrained by a number of factors, a survey conducted by Freddie Mac and Fannie Mae earlier this year found. Chief among them are the lack of available warehouse funders for e-notes, the lack of investor acceptance and the need for turn-key technology that can offset the different paces at which stakeholders have adopted e-notes.
Demand and cost are also issues, according to the survey. Warehouse lenders noted in the survey that their customers were not asking for lines for e-notes. And technology costs remain high, limiting the return on investment given the current volume.
Beyond the six companies that have either completed or are in the approval process, Tibbitts said there are five other companies in the e-note space. She added that Freddie Mac would be willing to review those companies as well.