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HUD proposes a revision to single-family mortgage insurance

National Mortgage Professional
Jul 07, 2005

Old habits die hardMark SkinnereLynx, Mortgage Strategies Group, Electronic Signatures Its been approximately four years since the first paperless and electronically signed mortgage, and the industry is still struggling to understand the benefits of the electronic mortgage process. You would think that the Uniform Electronic Transactions Act of 1999 and Electronic Signatures in Global and National Commerce Act of June 2000 would have opened the door for electronically signed mortgage documents. However, there is not much evidence that this legislation has moved the mortgage industry to take advantage of the time saving, convenient, and cost reducing option. At Mortgage Strategies Group in Boca Raton, Fla., weve implemented electronic signatures for our loan application and disclosure documents. Loan application and disclosure package turnaround times were tracked and it was found that on average, using overnight services it took about seven days. This is in sharp contrast to the typical one-day return of our electronically signed documents facilitated by uSign, a service provided by eLynx. Over the past six months, weve delivered more than 90 percent of our loan applications and disclosure documents utilizing the electronic signature service. Most of our customers are signing and returning supporting documentation the same day, cutting six days out of our processing time. For Mortgage Strategies Group and its borrowers, reducing the process by six days is a big benefit, especially when rates are fluctuating. Electronic signatures provide several benefits over hand-signed documents: 1. Borrowers can sign documents at a time and place convenient to them. 2. The documents can be viewed and printed multiple times at the borrowers convenience. 3. Borrowers dont have to store a large packet of paper. 4. We dont have to resend documents that clients may have misplaced. 5. Because of the authentication process, we know that the person we interviewed over the phone is actually the person signing the loan application and disclosures. 6. We have much better control over the documents, helping us comply with the Gramm-Leach-Bliley Act. When Mortgage Strategies Group implemented electronic signatures, investors were notified five months before we went live with the process. In most cases, investors told us that we were the first to ask for acceptance of electronic signatures. Some investors told us they needed to develop a policy, while others simply didnt respond. And, some investors are still trying to determine a policy almost a year later. Now that weve utilized electronic signatures for six months, most of our investors have accepted the process. However, some have treated this like a visit to the dentist and procrastinated about developing an electronic signature policy. Whats hard to understand is the confusion and consternation in accepting something that improves control over the process, provides convenience to customers and costs less than sending a package of paper documents via overnight mail. So, this begs the question: What necessitates ink-signed loan applications and disclosure documents when every loan-closing package requires ink signatures? I guess old habits die hard. Mark A Skinner is CIO of Mortgage Strategies Group, a mortgage lender based in Boca Raton, Fla. He can be reached at (866) 989-1580 or e-mail mskinner@msgloans.com.
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