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Electronic Promissory Notes (Enotes) Model Collateral Acceptance Requirements and Guidelines

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Electronic Promissory Notes (Enotes) Model Collateral Acceptance Requirements and Guidelines Electronic Promissory Notes (eNotes) Model Collateral Acceptance Requirements and Guidelines Version 0.3 Date: May 14, 2020 Version 0.3 - 1 - 05/14/2020 Table of Contents 1. Introduction ............................................................................................................... - 4 - 2. Other Considerations ................................................................................................. - 5 - 3. Collateral Requirements ............................................................................................. - 5 - 4. Supporting Documentation Requirements .................................................................. - 6 - 5. eSignature Requirements ........................................................................................... - 6 - 5.1. Overview ....................................................................................................................... - 6 - 5.2. ESIGN and UETA ............................................................................................................. - 7 - 5.3. Disclosure and Consent .................................................................................................. - 7 - 5.4. Identify the Electronic Record to be Signed ..................................................................... - 8 - 5.5. Establishing the Borrower's Intent to Use an eSignature ................................................. - 8 - 5.6. Attaching/Logically Associating an eSignature to an Electronic Record ............................ - 8 - 5.7. Ineligible Types of eSignatures ....................................................................................... - 9 - 5.8. eNotarization and Presence at Signing ............................................................................ - 9 - 5.9. Transferable Record Requirements ............................................................................... - 10 - 5.10. Electronic Signing Process Information ......................................................................... - 10 - 6. eNote Document Requirements ................................................................................ - 11 - 6.1. Overview ..................................................................................................................... - 11 - 6.2. eNote Electronic Record Format and Software Licensing Terms ..................................... - 11 - 6.3. eNote View .................................................................................................................. - 11 - 6.4. Uniform Instruments.................................................................................................... - 12 - 6.5. eNote Transferable Record Clause ................................................................................ - 12 - 6.6. eNote Header .............................................................................................................. - 13 - 6.7. Signature Lines ............................................................................................................ - 14 - 6.8. eNote Footer ............................................................................................................... - 14 - 6.9. MISMO Format(s) Accepted ......................................................................................... - 14 - 6.10. Exceptions ................................................................................................................... - 14 - 7. eClosing Requirements ............................................................................................. - 14 - 7.1. Overview ..................................................................................................................... - 14 - 7.2. Electronic Record Security ............................................................................................ - 14 - 7.3. Authoritative Copy and Copies of the Authoritative Copy .............................................. - 15 - 7.4. Electronic Loan File ...................................................................................................... - 15 - Version 0.3 - 2 - 05/14/2020 7.5. Electronic Record ......................................................................................................... - 16 - 7.6. Encryption Requirements ............................................................................................. - 16 - 8. MERS (Mortgage Electronic Registration Systems, Inc.) eRegistry Requirements ... - 17 - 8.1. Overview ..................................................................................................................... - 17 - 8.2. Agreements ................................................................................................................. - 17 - 8.3. Registration ................................................................................................................. - 17 - 8.4. MERS eRegistry Designations ....................................................................................... - 18 - 8.5. Entities on the MERS eRegistry ..................................................................................... - 18 - 8.5.1. Controller ........................................................................................................................................ - 18 - 8.5.2. Controller's Delegatee .................................................................................................................... - 18 - 8.5.3. Secured Party .................................................................................................................................. - 18 - 8.5.4. Secured Party Delegatee................................................................................................................. - 18 - 8.5.5. eNote Location ................................................................................................................................ - 18 - 8.6. Transfer of Control or Location ..................................................................................... - 19 - 8.7. Change Data Transactions ............................................................................................ - 19 - 8.8. Change Status Transactions .......................................................................................... - 19 - 8.8.1. Pay Off + Reversal and Charge Off and Reversal ............................................................................ - 19 - 8.8.2. Registration Reversal ...................................................................................................................... - 19 - 8.8.3. Conversion to Paper and Reversal .................................................................................................. - 19 - 8.8.4. Transfer to Proprietary Registry and Reversal ................................................................................ - 20 - 8.8.5. Modification Reversal ..................................................................................................................... - 20 - 9. eNote Vault Requirements ....................................................................................... - 21 - 9.1. Authoritative Copy Requirements ................................................................................ - 21 - 9.2. Assignment of FHLB to Secured Party and Location roles in MERS eRegistry .................. - 22 - 9.3. Length of time to support the eNote and supporting documents ................................... - 22 - 9.4. Integrity and Security ................................................................................................... - 22 - 9.5. eNote Vault to eNote Vault Transfers and eDelivery ..................................................... - 22 - 9.6. Verifications ................................................................................................................ - 22 - 9.7. Encryption Requirements ............................................................................................. - 23 - 9.8. eMortgage File Documentation Management ............................................................... - 23 - 10. Servicing System Requirements ............................................................................ - 24 - 10.1. eMortgage Servicer ...................................................................................................... - 24 - 10.2. Performing Loans ......................................................................................................... - 24 - 10.3. Transfer of Servicing of eMortgages ............................................................................. - 24 - 11. Glossary ............................................................................................................... - 25 - Version 0.3 - 3 - 05/14/2020 The Federal Home Loan Bank (FHLBank) system has created a working group to explore the potential acceptance of electronic promissory notes (eNotes) as eligible collateral to secure extensions of credit. The working group has developed this draft document as a model that an FHLBank might adopt, in part or in full, in the event the FHLBank decides to accept eNote collateral. These model requirements apply only to collateral for extensions of credit and do not apply to loans sold to FHLBanks through their mortgage purchase programs (i.e. the MPF Program or MPP). 1. Introduction An eNote is a promissory note created, signed and stored electronically rather than by a traditional paper document signed
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