Technology is revolutionizing the real estate industry. One area that has shifted is the electronic mortgage, also known as e-mortgage. These digital mortgages are produced, transferred, and stored digitally without using a single piece of paper. There is no paper loan file, there is no loan officer, and there is no closing agent. With the rise in popularity of these products comes a list of terms that agents need to be familiar with when completing buyer transactions. Here are most of the principal terms you’ll need to know.

eMortgage:

An electronic mortgage (eMortgage) is a mortgage loan for which the promissory note and potentially other vital documents, such as the security instrument and loan application, are crafted and stored digitally rather than physically. Most eMortgages consist of a paper security instrument and an electronic note (eNote), with the signatures completed digitally. 

eNote:

A digital mortgage or promissory note (often used interchangeably with eMortgage).

eClosing:

A fully digital property closing in which all parties use secure digital signatures to “sign” all necessary documents. The promissory note must also be signed electronically to produce an eMortgage.

eNotarization:

A process by which a notary connects a digital signature and digital notary seal to an electronic document.

In-person eNotarization:

An eNotarization that takes place with both the signer and the notary physically together in the same place.

Remote Online Notarization (RON):

Basically the opposite of in-person eNotarization. In RON, live two-way audio/visual technology is used to complete an act of notarization, with the signer and notary connecting from two different physical locations. 

eRecording:

The digital delivery of real property documents such as deeds, mortgages, trusts, liens, and satisfactions between the document submitter and the appropriate recording office for filing in public records.

eDelivery:

The digital transmission of an eNote to a mortgage lender.

eServicing:

The electronic management of a borrower’s eMortgage payments and other mortgage servers, typically by a mortgage lender with eVault capabilities. 

eVault:

A secure digital clearinghouse for storing eNotes and other related data.

Hybrid closing:

A closing that uses a combination of digital and hard-copy documentation. In-person notarization is typical, and documents that don’t need notarization are usually electronic.

KBA:

(Knowledge-based authentication) — a form of identity verification that requires the signer to provide private information known only to them. It’s a standard part of the electronic mortgage process.

MERS:

(Mortgage Electronic Registry System) — a national electronic registry system created by the mortgage industry that records eNotes and tracks ownership changes.

MERS eRegistry:

A record system for identifying the holder (controller) and custodian (location) of the official copy of an eNote.

MISMO:

(Mortgage Industry Standards Maintenance Organization) — a standards establishment and maintenance board that oversees the electronic mortgaging process and the mortgage industry as a whole.

Multi-factor authentication:

A form of identity verification that uses more than one method to validate a person’s identity, such as fingerprints, a government-issued ID, a social security number, and/or randomized personal questions.