Ginnie Mae has issued an All Participants Memorandum (APM 21-07) [1] that expands the use of certain features found in its digital collateral program to paper mortgages, a move expected to make it more efficient for Issuers to modify paper mortgages.
Due to the far-reaching impact of the pandemic, certain features of Ginnie Mae’s Digital Collateral Program [2], namely the ability to use electronic signatures and to adopt remote online notarizations (RONs), were flexibilities enacted to benefit all Issuers and borrowers in the government-backed mortgage segment. By issuing APM 21-07 [1], Ginnie Mae will permit the usage of electronic signatures and RON for loan modification agreements on “paper” mortgages. Ginnie Mae notes that requirements for modifications of eMortgages or eNotes will be addressed in a separate APM.
“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 Ginnie Mae Acting EVP Michael Drayne [3]. “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.”
Effective immediately, all approved Ginnie Mae Issuers are permitted to use e-signatures when executing loan mod agreements, provided that:
- The promissory note is a paper promissory note bearing a wet signature;
- The electronically signed loan mod agreement complies with the recording jurisdiction's recordation requirements; and
- The eClosing platform the Issuer uses to obtain and maintain borrowers’ electronic signatures on the loan modification agreement must support verification of the borrower’s identity, and identify the symbol or process used as an electronic signature by the borrower and the purpose of the electronic signature.
Ginnie Mae recently reported [4] that its mortgage-backed securities (MBS) issuance volume for October 2021 stood at $69.36 billion, down from September’s issuance of approximately $73 billion, reflecting the liquidity of the program and its value in meeting the mortgage needs of homebuyers and rental property owners. Approximately 253,996 homes and apartment units were financed by Ginnie Mae guaranteed MBS in October.