Digital CollateralWorkgroup

AGENDA Digital Collateral PresentationeNote OverviewGinnie Mae Pilot Securitization ParametersPilot TimelineOpen Q&A

eNOTE OVERVIEW MERS eRegistry Established in 2004 as the mortgage industry’s system ofrecord and centralized registry for eNotes Stores the unique, tamper-evident digital signature of eNotes Enables transfers of eNotes and other mortgage documentsvia MERS eDelivery Tracks beneficial ownership rightsand servicing rights for over 75% ofall U.S. mortgages System of record for identifying theController (holder) and Location(custodian) of the authoritative copy ofregistered eNotesPROPRIETARY2

eNOTE OVERVIEW Surge in eNoteseNotes Registered on the MERS JulyAugustSeptember2018OctoberNovember DecemberJanuaryFebruaryMarchAprilMay2019# of Registrations in Q1 2019 Total of All Registrations in 201819,000 Q1 2019 vs. 17,000 FY 2018PROPRIETARY3

eNOTE OVERVIEW Follow the eNoteeNote is generatedby the eVault/eClosingplatformeNote isregistered on theMERS eRegistryBorrower(s)electronically signthe eNoteeNote isstored inthe eVaultSigned eNote isTamper-sealedCopy of the eNoteis sent to tradingpartner(s) viaMERS eDeliveryAuthorized Rights Holderpositions for the eNote Recordare transferred on the MERS eRegistry to applicable tradingpartnersPROPRIETARY4

eNOTE OVERVIEW Upcoming Secured Party FieldSecured Party: The Participant named on the MERS eRegistry that has been sold, pledged, assigned, or granted asecurity interest in the eNote by the Controller.Permit or restrict Transfers of Control or LocationSecuredPartycan:Initiate Transfers of Control or Location to itself or anotherMERS eRegistry ParticipantElect to receive notifications of changes to the eNoterecord’s statusPermit or restrict DeactivationsPROPRIETARY5

GINNIE MAE PILOT SECURITIZATION Key PillarsDelegatedCustodial Modelwill Remain inPlaceProvide forStreamlining byAccepting DigitalEquivalentsGII MIP:SecurizationGII MIPSecuritization Issuerresponsibility forcustodial andcertification costs DocumentCustodianfiduciary roleintact Final Cert.process remainsintact eNotes Original digitalinstruments Electronic copieseverywherephotocopies areacceptable Segregation ofeNotes Specific MSRtransferrestrictions6

GINNIE MAE PILOT SECURITIZATION Loan DeliveryIssuer is ready tosecuritize eNoteSubmits loan andpool data(HUD Forms)Pooling, Delivery, &Certification System,receives loan and pooldata and notifiesDoc. CustodianIssuer UpdatesMERS eRegistryaccording to reflectGinnie Mae rightsholder statusCustodiancompletes Initialcertification: Validates loanlevel data Validates MERS eRegistry and MERS SystemfieldsSatisfiesInitial Cert?NoIssuer performsdefectremediationprocessYesInitial Certification iscaptured and security isissuedIssuer submitsTrailing Docsto DocCustodian forFinal Cert.This is the biggest change during Pilot. Doc.Custodians will need to validate by referencingMERS system and eVault data/files.7

GINNIE MAE PILOT SECURITIZATION SecuritizationGII SecurityGII Multi-Issuer Pool CollateralLoan PackagesISSUER ABCeNote Loan PackagesISSUER ABCLoan PackagesISSUER XYZeNote Loan PackagesISSUER XYZ8

PROJECTED PILOT TIMELINE Draft Guidance and InputeVault RFIIssued byU.S. GSAIndustryFeedback DueFY 2019MayJunePilot LaunchAUGUSTJuly/Aug.Draft Guidancefor eNote Pilot tobe published forCommentFY 2020Sept.eVault acquisitionprojected to becompletedOct.Nov.Dec.Jan.Revised guidance andpilot criteria projectedto be issued9


by the eVault/eClosing platform eNote is registered on the MERS eRegistry Borrower(s) electronically sign the eNote eNote is stored in the eVault Signed eNote is Tamper-sealed Copy of the eNote is sent to trading partner(s) via MERS eDelivery PROPRIETARY Authorized Rights Holder positions for the eNote Record are transferred on the MERS