Members of The Electronic Signature and Records Association (ESRA) were actively involved in the policy change announced on Feb. 3, 2014 by the Federal Housing Administration (FHA) to now accept electronic signatures on documents associated with mortgage loans. From the onset of the initiative, the FHA sought insight and best practices from ESRA members for the adoption and use of e-signatures.
“These types of public policy efforts cannot be accomplished by a single organization,” said Ken Moyle, public policy committee chair for ESRA and chief legal officer and vice president of legal and corporate affairs for DocuSign. “FHA has been extremely proactive for several years in seeking guidance from ESRA and other industry groups to become educated on the applications of e-signatures and the technology available – FHA reviewed demos and took a close look at how businesses across different verticals are changing the consumer experience with e-signatures.”
The new policy, published by the FHA’s Office of Single Family Housing in Mortgagee Letter 2014-03, allows e-signatures on origination, servicing and loss mitigation documents as well as FHA insurance claims, REO sales contracts and related addenda.
“We have been working in collaboration with the FHA on this initiative since 2009 and are proud of the work our members have done to promote this policy change,” said Bill Brice, chairman of ESRA and CEO of AlphaTrust. “Further industry adoption of e-signatures and records will both streamline the origination process as well as the help reduce timelines for borrowers submitting documents relating to foreclosure avoidance options.”
Lenders may apply this policy to single family forward mortgages and FHA’s Home Equity Conversion Mortgages (HECM). In doing so, they must also adhere to 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. The FHA plans to accept e-signatures on mortgage notes by the end of the year.