Two mortgage fintechs will be the first to allow their customers to register loans with DART, a digital lien and eNote registry system that’s an alternative to the mortgage electronic registration system commonly known as MERS.
Blue Sage Solutions, a cloud-based lending platform, and Docutech, a digital fulfillment firm and First American company, are integrating with Digital Asset Registration Technologies, a registry utilizing blockchain technology. DART was developed by San Francisco-based Figure Technologies, which first sold eNote mortgages registered through DART last month
The registry automates the onboarding of assets and real-time settlement of loan pledges and sales for lenders and customers. It’s the only MERS alternative, Figure said, and unlike the existing system, DART averts duplicative registration of loans and riskier settlement arrangements with multiple parties.
“We recognize that in order for DART to more broadly bring speed, efficiency and cost savings to the industry, we must work closely with widely-used LOS, document generation, eClose and eVault providers,” said Leah Price, director of Lending Ecosystem at Figure and the lead for DART, in a press release.
Blue Sage, which serves retail, wholesale and correspondent lenders, will allow its users to register loans with both MERS and DART. Docutech, a provider of eSign, eClose and digital-to print technology, will now offer DART security instruments and DART SMART eNotes, which will be automatically registered with DART and onboarded to the Provenance Blockchain marketplace.
Leaders at the fintechs said the integration is a significant leap in allowing faster settlement for their customers.
"The implementation of DART not only allows for rapid settlement, but also provides an additional layer of security by making the records immutable,” said Carmine Cacciavillani, founder & president of Blue Sage.
The integration is the latest development around blockchain technology in the mortgage industry. Bay Area-fintech Haus last month
The blockchain registration system developed by Figure has drawn interest from capital markets participants from warehouse lenders to securitized bond investors, Dan Wallace, GM of Lending at Figure, told National Mortgage News. The instantaneous transfer of ownership with eNotes eliminates crucial time delays when documents have to pass through warehouse lenders, investors and their custodians.
“Therefore the lender doesn’t have to carry as many loans, the warehouse doesn’t have as much equity capital committed,” he said. “It doesn’t have all the market risk and therefore the liquidity risk or the volatility risks.”
