GMAC Mortgage Takes First Step to Service eMortgages

HORSHAM, Pa.--GMAC Mortgage Corporation (GMACM) announced today it is the mortgage industry's first investor able to purchase a correspondent loan with an eNote, complete the sale of the loan on the secondary market and service the eNote.

Under a licensing agreement with Document Processing Systems, Inc. (DPS), GMACM and GMAC Bank will use eMortgage Studio(TM) software to interface with the MERS(R) eRegistry, the electronic system of record that maintains current information on eNote ownership, servicing and location.

A host of GMACM and GMAC Bank activities benefiting from a paperless process will take advantage of this new platform. Lending and servicing functions in support of electronic loans through GMAC Bank's 3D Wholesale program will be completed via eMortgage Studio's secure Web portal. GMAC Bank's Correspondent Lending Division will use eMortgage Studio to execute transfers of control and update the eRegistry when purchasing and selling loans that have been originated and closed electronically. Additionally, GMAC Mortgage's Servicing Division will use the system to handle payoffs, assumptions and other operations requiring changes to the eRegistry's records.

"Servicing an eNote is an enormous first step to originating and servicing electronic mortgages," said Joanne Wight, VP of Correspondent Lending Operations at GMAC Bank. "Not only do GMACM and GMAC Bank have an immediate ability to participate in the eMortgage marketplace, we can also offer a solution for lenders seeking secondary market investors who are equipped to handle eNotes. This will be a significant competitive advantage as paperless loans gain popularity within the mortgage industry. eNotes and eMortgages are the final step in GMAC Bank Wholesale's paperless vision."

The advantages of paperless mortgages are many. Due to lower costs of handling and greater access to information, loans backed by eNotes are more valuable to investors than equivalent loans backed by paper notes. The MERS eRegistry enables lenders to sell these higher value eNotes on a best execution basis. Additionally, loan originators can now sell the servicing rights to eNotes without waiting several months for the processing of paper documents or the pooling of multiple loans, substantially increasing their revenues. Mortgage servicing companies incur substantial cost savings with eMortgages, including quicker financial transactions and a reallocation of resources.

"Our agreement with GMAC Mortgage and GMAC Bank marks a milestone for the mortgage industry," said Ted Morse, Executive Vice President of Business Development for DPS. "Last year, our eMortgage Studio became the first system to complete fully paperless, all-electronic mortgage closings and register eNotes with the MERS eRegistry. Earlier this month, the platform was used to execute the industry's first cash sale of an electronic mortgage loan. And now, GMAC Mortgage and GMAC Bank have invested in our technology, helping to accelerate the adoption of electronic mortgages and revolutionize the industry as we know it."

GMACM and GMAC Bank's eNote transactions will be the first to incorporate a third-party originator with a wholesale conduit, as all prior eNote transactions were completed by retail originators.

About GMAC Mortgage:

GMAC Mortgage Corporation, a wholly owned subsidiary of Residential Capital Corporation (ResCap), is headquartered in Horsham, PA. GMAC Mortgage is among the nation's top ten residential mortgage servicers and originators. As of December 2004, the company's servicing portfolio of more than $214 billion represents nearly 2 million customers throughout the nation. GMAC Mortgage is an established leader in the development, implementation and administration of customized subservicing programs for financial institutions, government sponsored enterprises, specialty finance companies, insurance companies, utility companies and investment banking firms. The company offers a full range of branding options to support the servicing of multiple products, including first mortgages, home equity loans and lines and unsecured consumer credit, as well as multiple asset grades, including non-prime and non-performing loans.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.