In just a little more than a year since Ginnie Mae launched its digital collateral program in late 2020, industry participation is ramping up. The first Ginnie Mae mortgage-backed security (MBS) backed by digital collateral settled in January 2021 — a $24-million deal from Quicken Mortgage — and nearly $2.1 billion of MBS have been issued since then.
Deployed as part of Ginnie Mae’s enterprise-wide modernization plan, the digital collateral program is an important segment of Ginnie Mae’s strategic effort to increase the flexibility and resonance of its platform on behalf of Issuers and the consumers they serve. Increasing eMortgage adoption is especially relevant as the industry develops and accelerates the use of virtual procedures to navigate the COVID-19 pandemic.
Many types of mortgage borrowers may need remote and virtual closing, but it could be argued that the most acute need is felt by deployed military servicemembers. Atlantic Bay Mortgage Group, an early participant in the Ginnie Mae digital collateral initiative, has its finger on the pulse of the veteran mortgage market and the impact digital collateral has on Department of Veterans Affairs borrowers stationed overseas. The company is headquartered in Hampton Roads, Va., which is home to one of the largest concentrations of active-duty military in the U.S.
Atlantic Bay closed its first eMortgage within the Ginnie Mae program in April 2021 and has since closed more than 300 mortgages, many to veterans. “There is a ton of value in digital collateral,” said Christina Brown, Atlantic Bay’s chief operations officer. “eMortgages are the way of the future, primarily because we want ease of service in every area of their lives, including the home-buying process.”
Many of Atlantic Bay’s military customers are purchasing a home in the United States while stationed overseas. That often requires a power of attorney (POA) for the servicemember who is unable to attend the closing in person. The flexibility enabled by the eMortgage/digital collateral process makes adjustments that may need to be made to the POA happen more quickly, reducing one level of stress.
“This allows the veteran to stay in control of their mortgage transactions, no matter where they are located,” said Brown.
Broadly, the issuance of securities backed by Digital Pools validates the flexibility and value of the Ginnie Mae securitization model, setting the foundation for more rapid adoption of eMortgages in the government market. In the year since launch, the initiative is the realization of efforts by numerous internal and external stakeholders in our digital initiatives, including Issuers, Document Custodians, warehouse lenders, technology providers and other industry partners.
With a dozen Issuers already on board, and more in the pipeline, there is no doubt that eMortgages are here to stay.