eNotes as Collateral at FHLBank Chicago

Since August 2020, FHLBank Chicago has accepted 1-4 family residential mortgage eNotes (Electronic Promissory Notes) as collateral.

Our FHLBank Chicago members can find everything they need here in order to begin pledging eNotes, find helpful resources, and get answers to frequently asked questions.

As your Illinois and Wisconsin FHLBank, we want to make sure we can provide liquidity and funding to all our members, in all economic environments, when you need it. We also need to navigate our own set of regulations and safeguards to protect the cooperative and the capital you have invested in us. With those considerations in mind, we have rolled out the eNote Acceptance Requirements and Guidelines, which defines acceptance criteria for 1-4 family loans executed with an eNote.

eNotes 101 and Benefits

What is an eNote?

What is an eNote?	What is not an eNote?
A promissory note that is originated, signed and stored electronically according to the standards for a “transferable record” pursuant to the Uniform Electronic Transaction Act (“UETA”) and the Electronic Signatures in Global and National Commerce Act (“ESIGN”). An authoritative electronic copy of the note exists in a file format known as a MISMO SMARTDoc and is registered with an eRegistry and stored in an eVault.	An electronic copy of a note signed using an electronic signature (eSignature) or device that simply affixes an image of a signature onto a document. An eNote is also not an image or copy of a wet signed document.

What is not an eNote?

A promissory note that is originated, signed and stored electronically according to the standards for a “transferable record” pursuant to the Uniform Electronic Transaction Act (“UETA”) and the Electronic Signatures in Global and National Commerce Act (“ESIGN”). An authoritative electronic copy of the note exists in a file format known as a MISMO SMARTDoc and is registered with an eRegistry and stored in an eVault.

An electronic copy of a note signed using an electronic signature (eSignature) or device that simply affixes an image of a signature onto a document. An eNote is also not an image or copy of a wet signed document.

eNotes Benefits

FHLBank Chicago members can voluntarily leverage an innovative technology to remain competitive, automate origination processes, strengthen compliance and documentation audit trails, and potentially reduce operational costs in the longer-term.

eNotes offer other business, membership, and compliance benefits:

Completely digital, virtual, and faster funding experience
Automated signing process with borrowers not physically present for origination or closing
Time efficiencies gained that could lead to reduced origination and servicing costs
No physical loan file delivery required to receive collateral value with FHLBank Chicago

eNotes Resources and Materials

Watch Our Latest eNotes and Collateral Update Webinar

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eNotes Frequently Asked Questions

What eligible loan types does FHLBank Chicago accept as eNotes?

What is preventing FHLBank Chicago from accepting eNotes in other eligible asset classes?

As a lender, if I can legally foreclose on a promissory note executed with a digital signature that does not meet the eNote requirements, why will FHLBank Chicago not accept the loan as eligible collateral?

Will FHLBank Chicago accept Hybrid Closing loans for all loan types?

Do you have more information on eNotes?

Questions?

We want to hear from you! Whether you are new to eNotes or have already implemented a solution at your institution, let’s discuss how we can support your institution’s goals. For more information and questions, please reach out to our eNotes leads, Sam Reindl, Collateral Operations and Reporting, at 312.552.2620 or sreindl@fhlbc.com; or Eileen Crane, Collateral Policy and Compliance, at 312.565.3333 or ecrane@fhlbc.com. They will work with your Sales Director to answer your questions and find the solutions your organization needs.