Notarize for Mortgage Updated: Instant MERS Registration
As I outlined in my blog post about the complications of eMortgage, an electronically executed promissory note must be delivered into the secondary market in a specific and timely manner. Given the concerns about the ownership and control of the note, the eMortgage ecosystem has developed standardized requirements that the promissory note be executed by the borrower in the form of a MISMO SMART Doc eNote. eNotes must also be stored, transferred, and registered via an eVault with connections to MERS for delivery into the secondary market. MERS is the legal system of record for identifying the Controller (holder) and Location (custodian) for the authoritative copy of a registered eNote and is the industry standard for this practice. These rules are enforced by Fannie Mae and Freddie Mac, who will not purchase electronically executed notes if they do not comply with this process.
To comply with these guidelines, an eNote must be registered, via the MERS eRegistry, within 24 hours after it’s executed by the borrower.
Today, we’re happy to announce that Notarize instantly registers eNotes with MERS, via our new API based registration capability. Meaning, the instant the closing is completed, the eNote is registered with MERS and ready to be sold into the secondary market. In our closings this week past week, eNotes were successfully registered within fractions of a second from the moment closings ended.
This has huge implications for the mortgage process. Today, it takes upwards of 45-60 days to finalize a full close of a mortgage. That timeline encompasses the upfront underwriting timelines and title services, the actual closing, all the way through the final sale into the secondary market.
With Notarize, the eNote is now instantly registered with MERS, thus addressing a critical step for our lenders towards a more efficient process. And, because our system also instantly returns the closing documents to the lender, they can elect to instantly sell the eNote to either Fannie Mae or Freddie Mac. It’s the combination of instant MERS registration and instant document delivery that is so powerful. While the industry is battling to take delivery into the secondary market from 45-60 days to 10, Notarize now takes another big step to solving this problem and bringing us closer to a same day closing through automation and technology efficiencies.
Even in a scenario where there’s an error in any document, it can be caught instantly because the lender immediately receives the executed closing package. And, the borrower doesn’t need to coordinate a second closing, they can just click to re-execute those documents online the instant they’re prepared. What would derail a closing is no longer an issue and the entire process can still move forward that same day.
When we launched Notarize for Mortgage in August, we were excited about the implications of an online closing for borrowers, but also highlighted that the digitization and automation of the closing process would allow countless other innovations to occur immediately before and after the closing. Instant MERS eRegistration is just one example of what we and our partners are doing to transform the mortgage process. Stay tuned for more!
Jennifer Parker is Notarize’s GM of Mortgage Solutions and was previously Fannie Mae’s head of eMortgage.