Description
Although most residential mortgage loans continue to be documented on physical paper the number of mortgages being closed electronically as eMortgages is increasing. Real estate counsel must be aware of the important advantages and disadvantages of paper mortgages versus electronic mortgages under the current legal framework.
An eMortgage is a mortgage loan that is evidenced by a defined type of electronic promissory note, with some or all of the loan documents being electronic documents rather than paper documents. A crypto mortgage is not a loan secured by cryptocurrency but rather a loan secured by real estate with the payment obligation evidenced by or tethered to a non-fungible token (NFT) that can be transferred without an electronic mortgage loan registry system. The NFT evidences the secured obligation if the obligation is embedded in the code of the NFT.
Paper promissory notes were formerly preferred because of the advantages and certainty they provided under UCC Article 3. However, both state and federal statutes enable an electronic equivalent to the negotiable promissory note, which is called a transferable record. More recently, states have begun to adopt the 2022 revisions to the UCC, including Article 12. Article 12 creates a new type of electronic record called a controllable electronic record (CER), which may evidence a payment obligation secured by real property. Under Article 12, a CER may be an NFT using blockchain technology, thus making the crypto mortgage a real and viable option.
Listen as Professor Julia (Julie) Patterson Forrester Rogers, Professor of Law at SMU Dedman School of Law, considers the current status and future of eMortgages and crypto mortgages and provides guidance for attorneys navigating the uncertain current and future legal framework in this area.
Presented By
Prof. Rogers teaches in the areas of Property, Real Estate Transactions, and Land Use. She writes and speaks on real estate finance, the residential mortgage market, predatory lending, and other topics in real property law. She is a member of the American Law Institute, the American College of Real Estate Lawyers, and the American College of Mortgage Attorneys. She served on the executive committee of the American Association of Law Schools Real Estate Transactions Section from 2010 through 2016, chairing the section in 2015. Prof. Rogers served as a member of the Texas State Bar Real Estate, Probate, and Trust Law Section Council from 2015 to 2019, and she served on the section’s committee that drafted the Texas Assignment of Rents Act, which became law in 2011. Prof. Rogers currently serves as the Reporter for the Uniform Law Commission Mortgage Modifications Act Drafting Committee. She is co-author of a property law casebook, Property Law: Cases, Materials and Questions, with Edward E. Chase, Jr. and W. Keith Robinson.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Wednesday, April 30, 2025
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Introduction: the evolving transition to electronic documents in residential real estate
- Traditional paper-based mortgage loans
- The transferable record as compared to a paper promissory note
- Payment and holder in due course issues with paper documents and transferable records
- CERs under UCC Article 12 and the crypto mortgage
- Control and security: current and future methods for controlling electronic mortgage obligations
- Advantages and disadvantages of moving to electronic mortgage documentation
- Practitioner pointers and key takeaways
The speaker will review these and other key considerations:
- How do traditional paper mortgage loans compare with transferable record eMortgage loans, the Article 12 electronic mortgage, and the crypto mortgage?
- What are the payment and holder and due course problems with traditional home mortgage loans and transferable records?
- Are CERs a solution to the paper mortgage problem?
- What is a crypto mortgage and how is it treated under UCC Article 12?
- How are control and security central to the legal framework of both transferable records and CERS?
