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Wells Fargo to begin buying eNotes

Digital mortgage revolution takes big step forward

Wells Fargo, which began accepting digital mortgage applications earlier this year, is about to take an even bigger step into digital mortgages, as the megabank announced Monday morning that it is going to begin buying eNotes (electronic promissory notes).

To facilitate this expansion of its mortgage business, Wells Fargo is partnering with eOriginal, a digital solution provider for the mortgage industry and a 2018 HousingWire Magazine Tech100 winner.

Through the partnership with eOriginal, Wells Fargo will begin buying eNotes through the bank’s correspondent channel, Wells Fargo Funding.

Wells Fargo says that the move represents a “major step forward” in the digitization of the mortgage business. And considering that Wells Fargo is the nation’s largest mortgage aggregator, this move is even more significant than it appears.

“Our ability to purchase eNotes is the latest step in our expansion in the digital lending space that broadens our approach to serving consumers and clients as we transform our mortgage business,” said Michael DeVito, head of Wells Fargo Home Lending.

“We’re committed to delivering innovative solutions throughout the mortgage lending process,” DeVito added. “With eOriginal providing eVault services, we’re aligned with a company that has a proven track record in the digital lending community.”

A quick explainer on what an eNote is. An eNote is an electronic version of the promissory note, the record of the obligation to repay the mortgage. Previously, this document was a paper document, but in recent years, a move towards digitization in the mortgage business saw a rise in a digital version of the document, called an eNote.

The eNote needs to be stored digitally in a way that ensures it has the same legal enforceability as a paper document, and for Wells Fargo and others eOriginal provides this storage capability through its eVault service.

eOriginal already works with Fannie Mae and Quicken Loans on each of their digital mortgage programs, and now it’s going to by working with Wells Fargo as well.

“Lenders transitioning into digital mortgage can move forward knowing a trusted technology partner is aligned with the industry’s leading aggregator,” eOriginal CEO Brian Madocks said.

“This agreement with Wells Fargo facilitates a new, essential outlet for lenders to deliver loans with eNotes into the secondary market,” Madocks added. “The capability will make digital mortgages accessible to a broad spectrum of lenders who can realize the advantages of going digital, such as increased efficiency and improved execution while also reducing risk.”

According to Wells Fargo, the bank will begin purchasing eNotes from a “select group” of lenders, and start moving to a broader market offering throughout 2019.

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