For years, electronic promissory notes occupied an awkward middle ground in mortgage lending. The concept was sound, the infrastructure was in place, and early adopters demonstrated that the model could work. Yet adoption remained uneven, often stalled by questions about investor acceptance, warehouse lender readiness and operational complexity.
That hesitation is becoming harder to justify.
What has changed is not simply technology, but the market’s tolerance for inefficiency. As funding timelines compress, margins tighten and secondary execution becomes increasingly time-sensitive, lenders are reevaluating where friction still exists in their processes. Increasingly, the promissory note itself is part of that conversation.
Recent industry data suggests eNotes are no longer a niche execution strategy. They are becoming a practical response to liquidity pressure.
Adoption signals are no longer ambiguous
ICE Mortgage Technology reported that eNotes reached a record 12.86% share of all mortgages registered on the MERS System in October 2025, with more than 2.8 million eNotes registered to date. That milestone matters not because it represents saturation, but because it reflects sustained, measurable growth in live production, not pilot programs. Lenders that move fully digital rarely revert back, and each incremental gain compounds downstream.
Even among lenders that have not yet implemented eNotes, intent is shifting. Fannie Mae survey data shows that while only about one in five lenders currently use eNotes, nearly two-thirds expect to adopt them within the next two years. The primary barrier cited is no longer internal resistance or borrower readiness, but uncertainty around partner and investor acceptance. That distinction matters. It suggests the debate has moved from “should we do this” to “how do we align the ecosystem.”
That alignment challenge is real, but it is narrowing. Agency acceptance is established. Ginnie Mae’s Digital Collateral Program continues to mature.. Most recently, Ginnie Mae announced that eNote-backed MBS will be eligible for PIIT transfers under the agency’s Co-Issue program—an operational change that supports greater flexibility at issuance while maintaining program oversight. Effective for issuances dated February 1, 2026 and thereafter, PIIT transfers may contain eNote collateral, and Ginnie Mae reports more than $102 billion in outstanding Ginnie Mae MBS are now backed by eNotes, supported by 47 approved eIssuers.
Full-year data from Ginnie Mae shows eNote growth of more than 300% from 2021 to 2022, followed by increases of 87% in 2023 and 67% in 2024. The deceleration reflects normalization rather than slowdown, signaling a shift from early experimentation to sustained production. While investor requirements are not uniform, they are increasingly documented and predictable. For lenders willing to map acceptance criteria and standardize delivery practices, the path forward is clearer than it was even a few years ago.
The economics behind the momentum
At the same time, leading lenders are demonstrating what scaled adoption looks like in practice. Some institutions now deliver the majority of their agency volume as eNotes, signaling that digital collateral can function as a default execution model rather than an exception. Those lenders are not chasing novelty. They are chasing certainty.
The business case for eNotes has sharpened as execution data becomes harder to ignore. Fannie Mae has reported that lenders delivering more than a quarter of their loans as eNotes are experiencing close-to-funding timelines that are up to five days faster than those of comparable paper notes. In an environment where warehouse utilization and capital velocity matter, that delta is meaningful.
Cost savings follow speed. Data presented at the 2025 Mortgage Bankers Association (MBA Secondary and Capital Markets Conference) has tied eNotes to average per-loan savings exceeding $200, driven by fewer document defects, reduced manual handling and lower post-closing overhead. At scale, those savings influence staffing models and reduce the operational drag that paper collateral introduces across funding and delivery.
Scaling requires operational discipline
Operationally, the lessons are also better understood. eNotes do not fail at the point of execution; they fail at handoffs. Integration gaps between eClose platforms, eVaults and downstream investor pipelines account for most early friction. Lenders that treat eNotes as a full lifecycle process, rather than a closing event, are the ones that scale successfully.
That lifecycle increasingly extends beyond funding and delivery into servicing. Servicers rely on clear, authoritative control of the promissory note to support routine loan administration, as well as more complex events, such as transfers of servicing, loss mitigation and default resolution. When eNotes are properly registered, tracked and maintained, they can reduce uncertainty around note location and control that has historically complicated servicing operations.
As portfolios change hands, digital collateral can also streamline servicing transfers by eliminating the need for physical note movement and manual reconciliation. Instead of coordinating paper file shipments and custody confirmations, servicers can rely on standardized, auditable records to confirm control and status. That visibility supports faster onboarding, reduces operational risk and helps ensure continuity as loans move across servicing platforms.
This involves validating metadata prior to transfer, planning for exceptions explicitly, and ensuring that monitoring is in place both after a loan leaves the closing room and throughout the life of the loan. It also means internal alignment. eNotes touch collateral custody, compliance, funding, secondary marketing and servicing. Programs stall when ownership is fragmented and accelerate when accountability is shared.
That discipline often depends on whether lenders and servicers work with technology partners capable of supporting consistent execution across the full loan lifecycle, rather than point solutions optimized for a single stage of the process. Fragmented platforms can reintroduce the same handoff risks digital collateral is meant to eliminate.
From digital initiative to baseline capability
Perhaps the most important shift is conceptual. eNotes are no longer framed primarily as a borrower experience enhancement or a digital transformation milestone. They are being evaluated as an execution strategy that spans origination, funding, delivery and servicing. Faster funding, fewer defects, stronger auditability, and more predictable collateral control resonate with secondary and servicing teams alike in ways that early digital messaging did not.
The market is not demanding universal adoption overnight. But it is rewarding lenders that remove avoidable friction from collateral movement. In this context, eNotes are transitioning from the category of “emerging technology” to that of an operational discipline.
For lenders assessing where incremental efficiency gains still exist, the evidence increasingly points to the note itself. The question is no longer whether the ecosystem can support digital collateral. It is whether lenders can afford to leave that value unrealized as execution expectations continue to rise.
Brian Webster is the president of NotaryCam, a Stewart-owned company.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: [email protected].
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