Knowing the ABEs of an eMortgage

By Gina Webster, Vice President, Escrow & Settlement Operations, Investors Title Insurance Company

How well do you understand all of the e’s in an eMortgage? Do you know the difference between an eClosing and an eMortagage? What exactly is an eVault? The terminology used today can be confusing. Below are some key terms and definitions to help you navigate the new eWorld.

An eMortgage is an electronic mortgage for which the loan documentation is created, executed, transferred and stored electronically. In an eMortgage, electronically-signed closing documents are paired with an original electronic promissory note (eNote) that has been signed on an eClosing platform and registered with the MERS eRegistry®.

eClosing is the act of closing a mortgage loan electronically through a secure digital platform, where some or all of the closing documents are accessed and executed electronically. While all eMortgages involve the act of eClosing, an eClosing is not considered to be an eMortgage unless the promissory note is also signed electronically. There are three basic types of eClosings: 

  • Hybrid eClosing Some documents are electronically signed and electronically notarized, while other documents, such as the Promissory Note and Deed of Trust, are “wet signed” and notarized the traditional way, with all parties in attendance. 
  • Full eClosing Documents are electronically signed and electronically notarized with all parties in attendance and in the same room as the notary. 
  • Online eClosing Documents are electronically signed and electronically notarized with parties interacting through videoconferencing.

An electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

eNotarization is a process by which a notary provides an electronic notarization for an electronic document. The effect is the same as a notary signing a sheet of paper, but it allows for easier transmittal of the document by email or another electronic source and enables electronic filing.

  • In-Person Electronic Notarization (IPEN) All documents are electronically signed in person with the notary being physically present.
  • Remote Online Notarization (RON) All documents are electronically signed with the notary being in a remote location using audio/video technology.

An eNote is an electronic promissory note which is created, signed and managed digitally.  Once closing is completed, the eNote is registered with the MERS eRegistry® and cannot be tampered with, changed, or lost.

An eVault is a secure electronic document management system for the storage and management of eNotes and other mortgage related electronic documents. The eVault holds the “authoritative copy” or electronic original of the eNote. The eVault also allows for verification, authentication, and auditability of the eNote, which provides mortgage originators, warehouse lenders, investors, servicers, and custodians the control needed to manage their electronic assets.

eRecording is the act of recording the security instrument and other recordable documents electronically with the county recorder or similar local public authority for the purposes of making real estate documents public and providing constructive notice.

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