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Bulletins

Bulletin No.: 2020-19
July 20, 2020

TO: MEMBERS

SUBJECT: Federal Home Loan Bank of Dallas to Accept eNotes as Collateral

Beginning July 21, 2020, the Federal Home Loan Bank of Dallas (Bank) will begin accepting eNotes as collateral for one- to four-family residential loans and closed-end, second-lien mortgage loans. Additional loan types for which eNotes will be accepted will be announced in the future.

There are three key steps members should take before delivering eNotes to the Bank.

Select an eClosing Provider

The closing of an eNote requires the use of a specialized computing platform, generally known as an eClosing system, that allows the closing agent and the borrower to electronically review, sign, store and transfer closing documents. You may refer to the eMortgage Closing Guide, a mortgage industry reference tool published by the Mortgage Industry Standards Maintenance Organization (MISMO), for detailed guidance on eSignature requirements. A link to this guide is available on the Bank's eNotes resource page.

Register with the MERS® eRegistry System

Registering your eNotes in the Mortgage Electronic Registration System (MERS®) eRegistry satisfies the control requirement of Section 201(c) of the E-SIGN Act and Section 16(c) of the Uniform Electronic Transactions Act (UETA) with respect to a transferrable record – eNote. Additionally, the MERS eRegistry does the following:

  • Allows your institution to designate the Bank as a secured party, enabling the Bank to take the eNote
    as collateral
  • Acts as the system of record for identifying the controller of the note (as defined in the MISMO glossary) and the location
  • Stores the unique digital signature
  • Stores key information used to identify the loan

Select an eVault Provider

The eNotes are stored in an eVault, an electronic storage location that houses the eNote and can also store any other supporting documentation. If your institution has an existing eVault, you will want to contact the Bank to test connectivity with the MERS® eRegistry. If you do not have an eVault, you may view a list of vendors on the Bank's eNotes resource page.

These steps are fully outlined in the eNotes Collateral Requirements and Guidelines, which outlines the Bank's criteria for accepting eNotes as collateral. You may also refer to the following resources:

All these materials may be found on the eNotes resource page on the Bank's website. You may also register for a webinar at 1:00 p.m. CT on Tuesday, July 21 that will walk through the process and address questions.

If you are ready to start delivering eNotes, or if you have any questions, please contact Collateral Services at 800.541.0597 or enotes@fhlb.com.
 
Sincerely,

Gustavo Molina
Senior Vice President and Chief Banking Operations Officer