Residential: Ginnie Mae moves one step closer to digital mortgages

Ginnie Mae is asking for input from the mortgage industry on its Digital Collateral Pilot – a pilot program allowing issuers to begin participating in digital mortgage programs currently in development.

“We’re excited to see Ginnie Mae’s digital strategy come to life,” said Stephanie Schader, Vice President of The Collingwood Group, a SitusAMC company. “Creating a digital mortgage ecosystem will bring Ginnie Mae’s infrastructure closer in line with the industry’s technological capabilities, ultimately attracting more issuers and expanding access to mortgage credit.”

“This announcement underscores Ginnie Mae’s commitment to modernizing its mortgage-backed securities (MBS) program and platform in order to create a digital mortgage ecosystem, from loan application through securitization,” said Angel Hernandez, Ginnie Mae’s Director MBS Policy and Program Development, in the Request for Input (RFI). “It will also enhance the integrity of Ginnie Mae collateral by reducing the risk from defects in loan instruments.”

The pilot was first envisioned under Ginnie Mae’s Digital Collateral Strategy – part of the agency’s 2020 plan released in June 2018.

The RFI solicits feedback on several elements of the Digital Collateral Pilot, including digital promissory notes, electronic documents and eClosings. The parameters of the pilot are detailed in Ginnie Mae’s Digital Collateral Guide, which features more than 30 pages outlining the entire proposed digital mortgage process, including eIssuer and eCustodian eligibility, structuring digital pools, loan package delivery and servicing considerations.

Ginnie Mae has asked industry stakeholders to weigh in on any requirements that are difficult to understand, the feasibility of implementing new systems and processes, barriers to adoption, and areas where additional guidance may be needed. Comments are due by December 1, 2019.

“This is certainly an ambitious undertaking, but essential to ensuring the long-term sustainability and viability of Ginnie Mae’s MBS program,” said Schader. “Ongoing dialogue with lenders, servicers and even technology providers will be essential to working out any kinks prior to full-scale implementation and ensuring the success of the new digital mortgage program.”

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