C1-2-04, Delivering eMortgages to Fannie Mae (12/13/2023)

Lenders may deliver eMortgages for either whole loan or MBS execution. Fannie Mae accepts mixed MBS pools - ones that contain both paper notes and eNotes. eMortgages are delivered to Fannie Mae via the MERS eDelivery service. See MERS website for more information on MERS eDelivery.

The eNote and any documents required for certification (for example, a power of attorney, if applicable) must be transmitted to Fannie Mae's eVault via MERS eDelivery (or direct eDelivery for customers using Fannie Mae's eVault provider). Fannie Mae will return an electronic approval message once the systems have accepted the document. Sellers are not required to use a document custodian to maintain other related loan documents unless otherwise required. For more information on delivering eMortgages, refer to Fannie Mae's eMortgage Technical Requirements.

After the eNote has been successfully delivered to Fannie Mae, lenders (or their warehouse providers) should transmit a request to the MERS eRegistry to begin the process of transferring Control and Location (the location of the eNote's current Authoritative Copy) of the eNote to Fannie Mae. A "Transfer of Control and Location" request must be transmitted to the MERS eRegistry to initiate the transfer of ownership and to update the MERS eRegistry to show Fannie Mae as the Controller and Location of the Authoritative Copy of the eNote. Lenders are expected to monitor the status of transfer requests to ensure they have been completed successfully. The transfer request must include an "Effective Date" of the same day as the request. The Effective Date is used by the MERS eRegistry to denote the date that the transfer must be complete. Fannie Mae requires that the MERS eRegistry records, for loans transferred to Fannie Mae, contain the Servicer's MERS Org ID (or sub-servicer, if applicable) in the "Master Servicer" field on the eRegistry in order to enable that party to perform certain transactions within the MERS eRegistry). (Note: If the Master Servicer is changing coincident with the sale to Fannie Mae, the update to this field can be completed after completing the Transfer of Control and Location to Fannie Mae.)

If prior to Fannie Mae purchasing the loan, the lender requires the eNote to be returned, the lender must submit a Request for Transfer of Control of eNotes (Form 2009e) to Fannie Mae's Custodian Oversight Department (see  E-1-02, List of ContactsE-1-02, List of Contacts). 

Lenders may originate or purchase eMortgages using interim funding from a warehouse provider in a manner that establishes the warehouse provider as lienholder of each related eNote and that shows the warehouse provider as being in Control of each related eNote at eMortgage settlement or that reflects the warehouse provider as the "Secured Party" in the MERS eRegistry for the related eNote. In order to facilitate Fannie Mae's purchase or securitization of an eMortgage in which a warehouse provider has a security interest, the warehouse provider must perform (or cause to be performed) one of the two following actions depending on whether the warehouse provider is named as the Controller or as the "Secured Party" of an eNote.

• If the warehouse provider is in Control of an eNote prior to sale to Fannie Mae, the warehouse provider must transfer Control and Location of the related eNote to Fannie Mae, on the lender's behalf, using the warehouse provider's MERS Org ID for pre-purchase inspection, among other things.
• If the warehouse provider is named as the "Secured Party" in the MERS eRegistry on an eNote prior to sale to Fannie Mae, the warehouse provider must approve a Transfer of Control and Location to Fannie Mae that has been initiated by the lender, or the warehouse provider may itself (or through a designated agent) initiate a Transfer of Control and Location to Fannie Mae, on the lender's behalf. At the conclusion of such transaction, Fannie Mae will be named in Control and Location and there will be no named entity in "Secured Party".

Lenders and its warehouse providers must use Fannie Mae's Loan Delivery application, in accordance with their respective agreements with Fannie Mae, to submit or validate wiring instructions for the account to which purchase proceeds (in the form of cash or MBS) for eMortgages covered by such interim funding agreements should be delivered. Lender authorizes Fannie Mae to deliver the purchase proceeds (in the form of cash or MBS) for eMortgages in accordance with such wiring instructions. 

In connection with delivery of funded eMortgages to Fannie Mae, warehouse providers must enter into an eNote Control Transfer and Custodial Agreement with Fannie Mae in which, generally, Fannie Mae accepts control of delivered eNotes until such time as:

• Fannie Mae makes payment and the warehouse provider releases its security interest, or
• Control of the eNotes is returned to the eRegistry participant that was previously in Control prior to Fannie Mae; provided that if there was a "Secured Party" named on the eNote prior to transfer to Fannie Mae, Fannie Mae will first assign the applicable MERS Org ID to the "Secured Party" field and then initiate the transfer. Lender authorizes Fannie Mae to take such actions.

If, before Fannie Mae buys any eMortgages, Fannie Mae receives written notice from a warehouse provider that warehouse provider has exercised its right to acquire the eMortgage because of a default, lender authorizes Fannie Mae to transfer Control and Location of the related eNote to warehouse provider (or its designee).

If Fannie Mae believes a party other than lender or the applicable warehouse provider has an interest in any eMortgage (or the related purchase price), lender agrees that Fannie Mae may, in its sole discretion, decline to purchase such eMortgage and notify lender and warehouse provider of such decision.

In return for Fannie Mae's accommodation of delivery of funded eNotes that are subject to warehouse lending arrangements and for Fannie Mae's performance of certain obligations under the eNote Control Transfer and Custodial Agreement that are in the lender's interest, the lender hereby agrees to indemnify and hold harmless Fannie Mae against all Fannie Mae losses (as defined in  A2-1-03, Indemnification for LossesA2-1-03, Indemnification for Losses) arising or resulting from any act or omission of lender or Fannie Mae (except those arising or resulting from Fannie Mae's gross negligence or willful misconduct) made in connection with the terms of the eNote Control Transfer and Custodial Agreement.

Fannie Mae provides in-house automated document certification (auto-certification) for eligible eNotes. For eNotes that cannot be auto-certified but are permitted to be sold to Fannie Mae, these will be routed for manual certification by a document custodian. A document custodian interested in certifying eNotes on behalf of Fannie Mae must meet all of the eligibility requirements outlined in the Requirements for Document Custodians. Contact Fannie Mae's Custodian Oversight Department (see  E-1-02, List of ContactsE-1-02, List of Contacts) for additional information on certifying eNotes on behalf of Fannie Mae.

Lenders must perform the following process in addition to delivering the eMortgage through MERS eDelivery:

• Add the eNote Indicator flag to the corresponding loan(s) in Fannie Mae's Loan Delivery application which identifies the loan as an eMortgage loan; and 
• Perform the usual whole loan or MBS delivery through Fannie Mae's Loan Delivery application.

NOTE: If for any reason an eMortgage must be transferred back to the lender (for example, in the event of an error on the loan or transferred in error), the lender must submit Form 2009e to Fannie Mae's Custodian Oversight and Monitoring Department to request the transfer (see  E-1-02, List of ContactsE-1-02, List of Contacts).