Sunday, January 29, 2006

Freddie Mac eMortgage Handbook

CLC member Mike Gordon has alerted us that his employer Freddie Mac has recently issued its eMortgage Handbook. As noted on their Web site:

The use of electronic documents to originate mortgages is increasing. The shift from paper documents with wet ink signatures to electronic documents brings the promise of improved efficiency and higher data quality to the home buying process. Freddie Mac continues to be a notable contributor to this evolution through our participation in industry standards groups.

Since the publication of our Preliminary Specifications for Electronic Mortgage Loan Documentation in 2001, the industry and our planned electronic mortgage (eMortgage) process have transformed. Our current specifications, which we have captured in our eMortgage Handbook, provide greater detail about our requirements for electronic documents in the mortgage loan file, and the care and storage of these documents throughout the life of a loan. The eMortgage Handbook is intended to provide directional guidance to industry participants as they make decisions regarding the use and implementation of electronic documents.

This is an important new area of practice that many of our members can contribute to both in ABA as well as in their 'day jobs.' Note the parallel efforts by our Joint Working Group on Transferability of Electronic Financial Assets, which is on the verge of publishing its white paper (created jointly with the Open Group) on the questions of 'control' in electronic chattel paper (see UCC 9-105). It's an example of the promise of eCommerce that we spoke of so glowingly a few years ago and then began to wonder if it was really going to happen. Well, it is.

Mike notes: "In accessing the Handbook, we only request that members remember that it is copyrighted and that copying or re-printing it in whole or part for distribution outside the Cyberspace Committee will require Freddie Mac's written consent. Certainly, quoting or excerpting with citation or downloading a personal copy is permitted."

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