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Two Southern banks complete mortgage eNote transfer


Truliant Federal Credit Union is the first Southeast financial institution to officially complete a transfer of an eNote – or an electronic promissory note – to Federal Home Loan Bank of Atlanta (FHLBank Atlanta), as part of FHLBank Atlanta’s eNote pilot program, the lender said Tuesday.

Going forward, FHLBank Atlanta will accept all eNotes, per bank officials.

An eNote is a digital version of the promissory note which must meet the requirements of electronic transaction laws. eNotes contain the same information as a traditional mortgage note – on paper – but they are created, signed and stored digitally.

FHLBank Atlanta used the eNote transfer to test the infrastructure necessary to allow a limited number of FHLBank members to report eNotes as collateral. Truliant, which serves more than 270,000 members and over 30 member financial centers in North Carolina, South Carolina, and Virginia, met a series of standards relating to eSignatures, eNote documentation, eClosings, eRegistry requirements, and eNote vault requirements, said Todd Hall, Truliant president and CEO.

“This final digital step makes the whole home-buying experience quicker, more accurate and secure,” Hall said. “Truliant completed its first end-to-end eClosing on March 27 last year. One year later we are the first member to deliver an eNote to FHLBank Atlanta.”

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Elaine Marshall, North Carolina Secretary of State, described it as a “win-win-win for home buyers, the business sector and the government sector in making the mortgage closing process less time consuming, less stressful, and even more secure.”

When a closing is completed, the eNote is tamper-sealed and registered with the MERS eRegistry system. eNotes cannot be altered without the change being recorded an a digital audit trail, said Rob Kovach, FHLBank Atlanta’s chief credit officer.

“Interest in the ability to pledge eNotes as collateral continues to grow among our members, and this initial transfer demonstrates that we now have the ability to meet this growing demand,” Kovach said.

Officials said 11 federal home loan banks set servicing system requirements relating to eSignatures and eNote documentation in early 2020 – the culmination of three years of development.

Full e-Closings reduce the use of paper, legal fees, mailing and courier costs.

“eClosings are one part of an evolving program we’ve put in place to increase our competitiveness, put more members in homes, and allow them to complete purchases on their schedule,” said Beth Eller, Truliant mortgage lending vice president.

Truliant announced in 2019 it would be the first North Carolina Credit Union to offer complete eClosing services on mortgages, and the second North Carolina-based financial institution to use it. In May 2020, Truliant announced that Freddie Mac would be buying eNotes from Truliant as collateral for mortgage-backed securities.

Truliant gained approval in May to offer “set aside” funds assistance from Federal Home Loan Savings Bank of Atlanta. The funds allow distribution for first-time homebuyers of up to $5,000, up to $7,500 for first-time home buyers who are current or retired law enforcement officers, educators, firefighters, and health care workers, and up to $10,000 if available to first time or non-first-time veteran homebuyers that are currently serving or have served in an overseas military intervention – or their surviving spouses.


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