BSI Financial Services has received Ginnie Mae approval to issue and subservice electronic promissory notes, giving mortgage companies another option for managing government-backed loans through a digital process.
The Irving, Texas-based mortgage servicer was approved as both an eIssuer and eSubservicer under Ginnie Mae’s Digital Collateral Program, BSI announced Wednesday. Its initial issuance authority covers up to 1,000 eNotes.
The dual approval allows BSI to create eNotes and loan packages for delivery into eligible Ginnie Mae digital pools. It can also service digital loans for other approved issuers, positioning the company to support electronic collateral after closing and throughout the servicing lifecycle.
“The Ginnie Mae approvals reflect the work we’ve done to build the technology, operational controls, and expertise needed to support digital mortgage assets,” BSI founder and CEO Gagan Sharma said. “They strengthen our ability to serve clients as the adoption of eNotes continues to grow.”
Ginnie Mae requires companies participating in its Digital Collateral Program to demonstrate that their systems and controls can protect the authoritative copy of an eNote and record changes in its ownership, location, and servicing status.
BSI said it completed transaction testing involving servicing transfers, loan modifications, assumptions, payoffs, charge-offs, and other events handled through the MERS eRegistry.
The approval is particularly relevant to lenders that originate FHA, VA, or USDA loans but lack the infrastructure or servicing capabilities needed to manage electronic collateral after closing.
Participating in the program requires more than offering borrowers an electronic closing. Ginnie Mae eIssuers must use qualified eClosing and eVault systems, maintain access to the MERS eRegistry, work with an approved electronic custodian, and demonstrate the ability to perform required eNote servicing functions.
BSI currently services nearly $50 billion in mortgages. The company is approved to service loans by Fannie Mae, Freddie Mac, the Federal Housing Administration, Department of Veterans Affairs, and U.S. Department of Agriculture. It has been a Ginnie Mae-approved issuer since 2015.
What It Means
The approval does not immediately change the loan-level process for most originators. Its significance is further downstream: lenders that generate eNotes need qualified partners capable of preserving the digital chain of control through securitization, servicing transfers, modifications, and payoff.
For government lenders, that broader infrastructure could make fully digital closings easier to scale without building every component internally.
*This article was drafted with AI assistance and reviewed and edited by a human editor before publication.
