B8-8-01, General Information on eMortgages (12/13/2023)

An eMortgage is a loan for which the promissory note and possibly other documents (such as the security instrument and loan application) are created and stored electronically rather than by traditional paper documentation that has a pen and ink signature. Because some recording jurisdictions will not yet accept electronic documents for recordation, eMortgages may consist of a paper security instrument and an electronic note (eNote).

This topic provides general information on the requirements for the origination and sale of one- to four-family eMortgages that Fannie Mae will purchase and securitize. See  A2-1-01, Contractual Obligations for Sellers/ServicersA2-1-01, Contractual Obligations for Sellers/Servicers for special approval requirements for sellers and servicers of eMortgages.  Additionally, the eMortgage Technical Requirements are incorporated into the terms of the lender's Mortgage Selling and Servicing Contract, as amended by the eMortgage Addendum.

Each lender must use an eNote technology provider that has completed integration testing with Fannie Mae (see eClosing Technology Service Provider List). The lender is responsible for determining that the technology provider meets the legal, technological, and operational requirements necessary to electronically create valid and enforceable mortgage obligations and/or effectively service eMortgages and that it otherwise complies with Fannie Mae's requirements (which may be in addition to minimum statutory requirements). A lender cannot use any other software technology or any other technology provider without the express written prior approval of Fannie Mae. Lenders must inform Fannie Mae prior to making substantial technology changes including changes to eNote or eVault technology providers to ensure changes are coordinated with Fannie Mae systems.

The lender must ensure that it has executed all tests required by Fannie Mae and that all systems and processes necessary to deliver and/or service eMortgages pursuant to this Guide and the MERS eRegistry requirements, are fully operational, including, systems integration among the lender, Fannie Mae and MERS.

The lender makes all of the following representations and warranties with respect to each eMortgage sold to and, where applicable, serviced for Fannie Mae:

• Each eMortgage is evidenced by an eNote that is a valid and enforceable Transferable Record Pursuant to the Uniform Electronic Transactions Act ("UETA"), or the Electronic Signatures in Global and National Commerce Act ("ESIGN"), as applicable, and there is no defect with respect to the eNote that would confer upon Fannie Mae, or a subsequent transferor, less than the full rights, benefits and defenses of Control (as defined by the UETA and ESIGN) of the Transferable Record.
• Prior to transfer to Fannie Mae, the lender is an entity entitled to enforce the eMortgage and, subject to  C1-2-04, Delivering eMortgages to Fannie MaeC1-2-04, Delivering eMortgages to Fannie Mae, is named the Controller (the person having control of the Transferable Record) on the MERS eRegistry; and, except as provided in that topic, the lender's right to sell or assign is not subject to any other party's interest or to an agreement with any other party.
• All electronic signatures associated with the eMortgage are authenticated and authorized.
• The lender has established procedures and controls limiting access to the lender's eMortgage delivery platform and the MERS eRegistry to duly authorized individuals, and Fannie Mae is entitled to rely on any transmission, transfer or other communication via these systems to be the authorized act of the lender.
• Any transfers of Control of the eNote are authenticated and authorized.
• The Authoritative Copy (a single, unique, identifiable, and generally unalterable copy) of the eNote has not been altered since it was electronically signed by its issuers.
• There has been, at all times, one and only one Authoritative Copy of the eNote in existence, and all copies other than the Authoritative Copy are readily identifiable as non-authoritative copies.
• The eNote is not subject to a defense, claim of ownership or security interest, or claim in recoupment of any party that can be asserted against the lender.

Most conventional loans can be sold to Fannie Mae as eMortgages. This includes fully amortizing fixed-rate and adjustable-rate loans. However, the following are not currently permitted to be sold as eMortgages:

• loans for properties in Puerto Rico,
• loans to inter vivos revocable trusts,
• HomeStyle Renovation loans,
• New York CEMA loans,
• single-close construction-to-permanent loans,
• co-op share loans, and
• Texas Section 50(a)(6) loans.

The following transactions are eligible for sale as an eMortgage, but require supplemental documents for certification.  The supplemental document must be eDelivered to Fannie Mae's eVault along with the eNote.

• notes executed with a power of attorney,
• RD-Guaranteed Section 502 loans,
• loans with a principal curtailment prior to purchase, and
• loans with temporary buydowns.

Loans with supplemental documents (required for certification) other than those listed above are not eligible for sale to Fannie Mae as an eMortgage,

Other than the above eligibility restrictions, all other standard Fannie Mae underwriting and eligibility requirements apply to eMortgages.

By selling an eMortgage to Fannie Mae, the lender represents and warrants that the type of electronic signature that is used by the borrower to sign the eNote and any other electronic record associated with the transaction is legal and enforceable under applicable law and the electronic signature was not effected by means of audio or video recording.

The systems and processes employed in the execution of an electronic signature, including clearly identifying the electronic record being signed, clearly displaying the borrower's name and requiring the borrower to take action to initiate the electronic signature. A single electronic signature cannot be applied to multiple electronic records simultaneously.

For complete requirements for transfer of control, certification and custody, and selling of eMortgages, refer to C1-2-04, Delivering eMortgages to Fannie MaeC1-2-04, Delivering eMortgages to Fannie Mae.

Lenders selling eMortgages to Fannie Mae that were originated by a third-party broker or lender are responsible for establishing guidelines and procedures to ensure that the loans are created and maintained in accordance with the requirements of this Guide. Such guidelines and procedures must be furnished to Fannie Mae upon request and may be a requirement for eMortgage approval.

For complete requirements for servicing eMortgages, refer to Fannie Mae's Servicing Guide.