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FHA to accept more docs with electronic signatures


WASHINGTON – The Federal Housing Administration (FHA) gave lenders more authority to accept electronic signatures (e-signatures) on documents associated with mortgage loans.

The new policy allows e-signatures on origination, servicing and loss mitigation documents, as well as FHA insurance claims, REO sales contracts and related addenda. Current FHA policy allows for electronic signatures only on third-party documents, such as sales contracts and others not controlled by the lender.

FHA Commissioner Carol Galante says the agency is “bringing our requirements into alignment with common industry practices.” She says it will “make it easier for lenders to work with FHA” and provide “greater efficiency in the homebuying and loss mitigation process.”

Lenders choosing to use e-signatures may start doing so immediately for single-family forward mortgages and FHA’s reverse mortgage products, Home Equity Conversion Mortgages (HECM).

Under the rule, lenders must follow the Electronic Signatures in Global and National Commerce Act (ESIGN); have specific technology and operational capabilities and controls, documented quality control processes, and the ability to adapt e-signature to FHA’s existing record retention processes.

Initially, e-signatures won’t be accepted on the mortgage note itself. FHA says it plans to begin accepting e-signatures on forward mortgage notes at the end of the year.

A Mortgagee Letter detailing FHA’s extended acceptance of e-signatures is posted on HUD’s website.

© 2014 Florida Realtors®

Related Topics: Mortgages