MortgagePolitics & Money

Ginnie Mae teases new enhancements to eNote program

Top Ginnie Mae exec says agency wants to have commingled eNotes with paper notes

Participants of Ginnie Mae’s digital collateral program want commingling of eNotes and paper notes, and the agency is not saying no.

Currently, the program allows for digital only pools. But if the agency moves to allow commingling, then eNotes and paper notes can be bundled in the same pool.

Lynne Chandler, director of the digital collateral program at Ginnie Mae, said during a webinar hosted by Falcon Advisors last week that she “hears participants” and that the agency “wants to make these things happen.”

“Whatever our participants are interested in is a priority for me,” Chandler said. “Restrictions have been in place for digital only pools because as a brand-new program, we didn’t know how many participants would make it through to securitization.”

Chandler said that the program now “has a great base of issuers” and that the number of participants is expected to grow, which will lead to more enhancements in the near future.

“We’ll see that first leg of being able to offer commingling,” she said. “Our programmers are busily coding.”

The government-sponsored enterprises, Fannie Mae and Freddie Mac, allow for the commingling of digital and paper notes in securitized mortgage pools.

The Ginnie Mae executive said that issuers of the digital collateral program also expressed interest in the pool issued for immediate transfer (PIIT) program .

Chandler said that this is something the agency is working on and that “it will be available sooner rather than later.”

“We just have to do a little bit of modernization and we will be able to deliver that,” she said. The exact timeline was not disclosed.

The webinar coincided with Ginnie publishing updates to its digital collateral program and announcing that they will open the door for new participants starting June 21.

The program has been in a pilot phase for close to two years with a limited number of approved participants.

Currently, the digital collateral program has 12 approved eIssuers, three eCustodians, and one eSubservicer.  Chandler predicts that it will take close to 30 days for new eIssuers to be granted approval to participate in the program.

The agency prefers working with eIssuers who have previous eNote experience, but it is urging all to apply, Chandler said.

As of June 1, Ginnie Mae’s digital collateral program will allow participants to perform eModifications to eNotes and will accept eNotes via a power of attorney. These updates apply to all existing eIssuers, Ginnie said.

The digital collalteral guide also provides eligibility and technological requirements for aspiring applicants, the agency said.

Alanna McCargo, president of Ginnie Mae, last month said these enhancements are a result of experience gained from running a pilot of the program.

“The lessons learned during the initial pilot of the digital collateral program are now incorporated into the eGuide and resulting enhancements,” McCargo said. “We are excited to expand access to this program.

Ginnie Mae launched its pilot program in 2020, paving the way for the agency to accept eNotes as satisfactory collateral for its mortgage-backed securities.

By early 2021, the agency announced the issuance of the first mortgage-backed security (MBS) backed by digital pools. The MBS were loans closed by Rocket Mortgage in December 2020.

Since the launch of the program, over $8 billion have been securitized in eNotes, according to the agency. All current participants in the Ginnie Mae program are existing Ginnie Mae issuers, a requirement under the program.

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