Due to the far-reaching impact of the COVID-19 pandemic, Ginnie Mae is expanding their digital collateral program to hereby permit the use of electronic signatures and remote online notarization for loan modification agreements on “paper” mortgages. The transition to digital signatures and notarizations provides flexibilities that would benefit both Issuers and borrowers in the government-backed mortgage segment.
The All Participant Memorandum (APM) states this policy is effective immediately. All approved Ginnie Mae Issuers are permitted to use electronic signatures when executing loan modification agreements provided that:
- The promissory note is a paper promissory note bearing a wet signature;
- The electronically signed loan modification agreement complies with the recording jurisdiction's recordation requirements; and
- The eClosing platform or other system(s) the Issuer uses to obtain and maintain borrowers’ electronic signatures on the loan modification agreement must follow the regulation guidelines, listed on the Ginnie Mae website.
- The electronically signed loan modification agreement is delivered to the Document Custodian in hard copy or delivered via electronic transmission, bearing evidence of recordation.
Ginnie Mae is also permitting the use of remote online notarization (RON) for loan modification agreements subject to notarization requirements in Section 3250.00 of the Digital Collateral Program Guide.
“Ginnie Mae is committed to providing Issuers with the tools they need to make it possible for qualified homeowners modifying their mortgages to do so with as few obstacles as possible,” said Michael Drayne, Ginnie Mae’s acting executive vice president. “Tens of thousands of homeowners coming out of the forbearance and other pandemic-related mortgage relief programs may utilize mortgage modifications to improve their financial situation, and we believe this policy change will help make the process proceed more smoothly for homeowners and servicers.”
MISMO also commends Ginnie Mae for recognizing and leveraging industry standards in allowing eSignatures and RON for loan modification agreements. “An important component of Ginnie Mae's action is that modifications transmitted electronically must be delivered only as MISMO SMART Docs or PDFs,” stated Seth Appleton, president of MISMO. “In addition, by utilizing the existing Digital Collateral Program Guide to expand the availability of RON for paper loan modifications, Ginnie Mae is ensuring that all participating RON platforms are in compliance with MISMO's RON standards.”
“This is a commonsense step to provide clarity to issuers and consumers and is exactly why MISMO has a RON Certification program, so that technology platforms can easily demonstrate their adherence to MISMO's RON standards,” Appleton continued. “Widely-deployed standards are critical to the real estate finance industry's digital progression, and we thank Ginnie Mae for its support in this endeavor. MISMO looks forward to continuing to deliver essential standards that improve efficiency, reduce cost and enhance the mortgage experience for all parties involved in a real estate transaction.”
