February 13, 2014
Ever since the FHA announced a wider acceptance of electronic signatures, some borrowers have had questions about the nature of this policy and what documents the FHA’s e-signature guidelines are applicable to.
In FHA Mortgagee Letter 2014-03, it was announced that on certain documents not already approved for e-signatures, the electronic version of a borrower’s signature would be recognized the same as a traditional one. But the FHA e-signature policy doesn’t extend to the actual mortgage note itself (in some cases at the time of this writing). Which documents DOES the new policy allow e-signatures on?
According to the mortgagee letter:
“Unless otherwise prohibited by law or excepted below, FHA will accept electronic signatures on the documents referenced below (collectively referred to as “Authorized Documents”), provided that the mortgagee complies with standards outlined in this ML.
–Mortgage Insurance Endorsement Documents: Electronic signatures will be accepted on all documents requiring signatures included in the case binder for mortgage insurance except the Note. As of December 31, 2014, FHA will accept electronic signatures on the Note for forward mortgages only. FHA will not accept electronic signatures on HECM notes.
–Servicing and Loss Mitigation Documentation: Electronic signatures will be accepted on any documents associated with servicing or loss mitigation services for FHA-insured mortgages.
–FHA Insurance Claim Documentation: Electronic signatures will be accepted on any documents associated with the filing of a claim for FHA insurance benefits, including the Form HUD-27011, “Single Family Application for Insurance Benefits.”
–HUD Real Estate Owned Documents: Electronic signatures will be accepted on the HUD REO Sales Contract and related addenda.”
Some documentation was already approved for e-signatures. They include the following as described in the mortgagee letter:
“FHA’s existing policy allowing electronic signatures on third party documents for forward mortgages and HECMs pursuant to Mortgagee Letter 2010-14 remains in effect and is unchanged by the ML. Third party documents as defined in ML 10-14, are those documents that are originated and signed outside of the control of the mortgagee, such as the sales contract.”
Do you have questions about FHA home loans? Ask us in the comments section. You can apply or get pre-approved for an FHA loan at FHA.com, a private company and not a government website.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: