According to Barbara Krawczun, Vice President of GMAC Bank, Trust Operations, the company's Document Custody Division plans to implement the Vault module, an electronic storage system by Houston-based Encomia as part of its overall mortgage note custodial services. The Vault module provides secure documentation authentication through smart cards and digital certificates. The solution complies with critical encryption standards.

By offering eCustodial services, GMAC Bank can provide services to lenders that currently sell eNote loans to key investors, says Krawczun. As a service provider, GMAC Bank is focused on meeting the existing and emerging needs of its customer base, such as GMAC Mortgage, our sister company.

"Implementing the Vault module is a natural fit for the GMAC Bank culture, which values customer service, responsiveness and continuous process improvement," Krawczun says. "GMAC Bank has an "innovation" culture and sees the value of being an early adopter of this new technology and business approach."

"The lack of a secure, electronic repository has been a major obstacle in the wide-scale adoption of eMortgage," says Andy Dubinsky, President and CEO of Encomia, LP. "GMAC Bank is leveraging its expertise as a document custodian that has a strong balance sheet, knows investors and understands the regulatory climate to lead the industry in taking this important first step."

The GMAC Bank, Trust Operations, Document Custody Division offers a safe and secure storage resource. It provides its clients with ease of access to their files while safeguarding the collateral with state of the art facilities and technology. GMAC Bank is committed to timely and accurate customer service that permits business continuity for our clients - and firmly establishes confidence in one's choice of document custody provider. The division's services include: initial and final pool certification in accordance with agency guidelines, accurate collateral tracking at the pool, file and document level and audit and safeguarding of portfolio or loans pending sale to an investor with proactive measures to alert our customers to file deficiencies. Document Custody Division associates are experts in agency and investor guidelines, including those of Fannie Mae, Freddie Mac, Ginnie Mae, FHLB and more.

"By building an infrastructure to support eNote volume, large originators such as GMAC Mortgage, as well as smaller lenders, hope to achieve a number of benefits such as lowered costs associated with moving paper (express mail costs); reduced facility costs; and reduced origination costs, notes GMAC Bank's Krawczun. According to the Mortgage Industry Standards Maintenance Organization (MISMO) and the Mortgage Bankers Association, early cost reduction estimates show that by using MISMO standards in a virtually electronic industry, direct origination costs could possibly be reduced by as much as $249 per loan, of which 75% of this amount directly benefits the lender. (MISMO Time & Motion Study, 2004).

In addition, eNote loans are available for purchase and sale early in the lifecycle of a loan, reducing lender borrowing costs and aggregator operational expenses. Electronic transactions increase security and reduce risk to assets by reducing the physical movement of sensitive documents. Electronic transactions are not restricted to specific locations and lenders have the opportunity to develop more robust business continuity plans while offering improved convenience to borrowers.

"We continue, along with other mortgage industry operational groups, to provide custodial services based on paper assets because, primarily, the mortgage industry relies on paper documents," observes Krawczun. "As the mortgage industry catches up to other forms of electronic commerce and supports the buying, selling and storage of electronic documents, these operational groups will want to align their businesses with how 'everyone else does it.' We believe by adopting new technology we will gain a jumpstart in supporting the evolving needs of our customers."