Optimizing Your Business with eNotes: Insights from industry leaders

Optimizing your lending process has never been more critical for staying competitive. Electronic promissory notes (eNotes) offer a direct path to improved efficiency, significant cost savings, and better borrower experiences. Our recent webinar featured industry leaders discussing eNote adoption, the compelling benefits they deliver, and why lenders should get started sooner rather than later. 

Our expert panel included Jeff Bode, Chairman and CEO of Click n' Close; James Macmillan, Client Services Co-Head at Deutsche Bank's document custody team; Raj Penugonda from Freddie Mac; and our own Chief eServices Officer, Brian Pannell. The panel was moderated by our Director of Sales, Leah Sommerville.

eNote adoption is growing 

eNote adoption has grown significantly as lenders across the country recognize the powerful benefits. Penugonda provided key adoption statistics: “In 2023, 6.5% of all MERS® system registrations were eNotes, increasing to 9.1% last year. At Freddie Mac, 11% of purchased loans were eMortgages.” 

Macmillan shared Deutsche Bank’s perspective: Since 2018, we've seen eNote adoption range from 5% to 10%, including both refinances and new home purchases.” This momentum is driving internal buy-in at many organizations, with Bode explaining: "We're at about ninety percent eNote adoption. We have an incentive for our divisions to use eNotes, and they understand the benefits."

The benefits of eNotes are undeniable 

eNotes deliver game-changing advantages across your operations, including: 

• Cost Savings  
  eNotes offer you meaningful financial benefits by streamlining manual processes throughout the mortgage lifecycle. By digitizing manual activities like document handling, reviewing, printing, and mailing, organizations realize substantial operational efficiencies. Bode highlighted these savings as a key adoption driver: "Switching from paper promissory notes to eNotes saves about $450 per loan. Lenders recognize the financial benefits.” Beyond courier and mailing fees, you’ll also reduce paper storage costs while minimizing expenses related to error correction and missing signatures. 
  

• Improved Liquidity  
  eNotes enhance your capital management by accelerating funding cycles. As Pannell highlighted, "eNotes can be transferred, delivered to the GSEs, and to investors in seconds." This efficiency creates practical advantages, particularly during high-volume periods. Bode shared an example from the 2020 refinance boom: "With warehouse banks at capacity, we used our own cash and sold loans within a day, increasing business sixfold in two months."  
  
  The benefits extend to secondary market transactions as well, with Bode noting, "Fannie and Freddie buy eNotes quickly. Worst case, it's the next day." 
  

• Enhanced Security and Risk Management 
  eNotes feature a triple-layer security system that works with the mortgage industry's central tracking registry. As Macmillan explained, "Every action on an eNote pings the MERS® eRegistry," ensuring ownership changes are properly recorded. The security features include tamper-evident technology—which Macmillan described as "an encrypted hash value that ensures the integrity of the eNote"—along with data encryption and comprehensive audit trails. This system effectively eliminates document loss concerns, with Bode noting, "We've never lost an eNote or misplaced one. We know exactly where they are.” 
  

• Better Borrower Experience 
  eNotes improve your customer’s journey by providing a streamlined, digital approach that meets modern expectations. The electronic process reduces common issues like missing signatures and document errors while offering greater convenience. Bode observed: "The process is easier for our consumers from the get-go and remains that way all the way to closing." This enhanced borrower satisfaction helps build stronger customer relationships and can lead to increased referral business. 

Getting started with eNotes is easy 

Making the shift to eNotes is easier than many organizations initially expect. Penugonda reassured listeners that implementation is straightforward: “eMortgage technology is one of the simplest to adopt. Numerous solutions exist for electronic closings.” He recommended working closely with your solution provider and integrating with the MERS® eRegistry early in the process. 

Pannell noted that implementation timelines have shortened: “Previously, it took months. Now, we can get lenders up and running with eNotes in a few weeks.” 

Bode shared how his staff overcame initial fears: “Our loan officers worried about looking inexperienced, but after experiencing digital closing, they became our biggest advocates.”  

The time for eNotes is now 

The market has created opportunities for forward-thinking lenders. Bode advised lenders to act now: “It’s easier to implement new processes when business is slow.”  

The growing number of investors who accept eNotes makes this the perfect time to develop an eNote strategy. As Bode put it, “The most profitable lenders over the past four years have used eNotes. There’s no reason not to embrace eClosings.” 

When you’re ready, DocMagic supports every type of digital closing, and will work side-by-side with you to launch your successful eStrategy. 

Want to learn more? Listen to the full webinar [Optimizing Your Business with eNotes].