Ginnie Mae Expands Use of Digital Collateral to Facilitate Loan Changes
Ginnie Mae widened her digital capabilities modified mortgages originally processed using more manual methods.
The government agency, a branch of the Ministry of Housing and Urban Development, began allowing the use of electronic signatures and remote online notarization for certain paper loan modifications on November 15.
This change could help service providers struggling with high volumes due to an increase in abstention exits. This follows a year in which Ginnie’s mortgage-backed securities issuance hit a new record. (The fiscal year for Ginnie and HUD ends September 30.)
“Ginnie Mae is committed to providing issuers with the tools they need to enable qualified homeowners to modify their mortgages with as few obstacles as possible,” said Michael Drayne, interim executive vice president of Ginnie, in A press release.
Electronic signature and RON, which have gained ground Last year amid the pandemic, are licensed in many jurisdictions, but local registration requirements prohibit their use in other regions. Additionally, in cases where an electronic note is used for remote online notarization, the mortgage companies involved must be licensed Ginnie Mae eIssuers.
Electronic documents containing change agreements and RON platforms must meet certain standards to ensure that digital data is in a format designed to be interchangeable between systems. The mortgage industry standards maintenance organization welcomed the requirements.
“An important part of Ginnie Mae’s action is that electronically transmitted changes should only be delivered as MISMO smart documents or PDFs,” Chairman Seth Appleton said in an emailed press release.
“This is a common sense step to bring clarity to issuers and consumers,” he said.
Some paper output requirements remain. The document custodian must produce a hard copy of any loan modification agreement for the loan record even if it is transmitted electronically.
Amending agreements are increasingly important for Ginnie Mae issuers to follow and retain due to a recent clarification this indicates that the mods affect the seasoning requirements for the pooling of refinances guaranteed by the Department of Veterans Affairs. In addition, regulators recently warned operators that they end leniency prolonged during the pandemic, making retention of documentation more urgent.