56
Feature
By: Marcos Posada, Esq.
and Jane E. Bond, Esq.
While 2020 had a surplus amount of catastrophic news, there was
one positive development with the rising volume of loans originating
with eNotes. According to the Mortgage Electronic Registration
Systems Inc. (MERS), the number of eNotes registered within their
eRegistry last year climbed to over 400,000 loans, a 264% year-over-
year increase in activity. A mere two years earlier, only 375 new loans
were registered on the eRegistry.
An eNote is the electronic equivalent of a
paper promissory note that is negotiable under
Article 3 of the Uniform Commercial Code
and is used by Fannie Mae and Freddie Mac.
e federal Electronic Signatures in Global
and National Commerce Act (ESIGN Act)
made eNotes legally enforceable in all 50 states
and the District of Columbia. e state-level
Uni-
form
Elec-
tronic
Transaction
Act (UETA)
has been passed
in 48 states, the
District of Co-
lumbia and the U.S.
Virgin Islands, with
New York and Illinois
having nonconforming
electronic transaction laws.
56
HOW TO
RESPOND
WHEN
ENOTES
DEFAULT
The rising volume of eNotes could be mirrored by a
rising level of default enforcements.
