March 31, 2014
Recently, the FHA updated its electronic signature policy to accept “e-signatures” on a wider range of documents related to FHA home loans. According to the official site at www.FHA.gov, “FHA will accept electronic signatures on the following ‘Authorized Documents’ (see below), provided they are not otherwise prohibited by law, and comply with the standards set forth in Mortgagee Letter 2014-03 and with the Electronic Signatures in Global and National Commerce (ESIGN) Act.”
The mortgagee letter issued at the end of January 2014 stated that FHA recognizes electronic signatures within certain limits as defined by the ESIGN act. “The ESIGN Act defines electronic signatures as “any electronic sound, symbol, or process attached to or logically associated with a contract or record and executed or adopted by a person with the intent to sign the record.”
There are certain exceptions…according to the FHA official site FAQ section and the mortgagee letter, borrowers should know “FHA will not accept an electronic signature that is solely voice or audio. This policy applies to FHA Single Family Title I and II forward mortgages and HECMs.”
What type of documents does the FHA accept e-signatures on? Here’s a list as found on the updated FHA/HUD official site:
• Mortgage Insurance Endorsement: All documents requiring signatures in the case binder (including the URLA & addendums, Lender Underwriting Transmittal Summary, & Conditional Commitment), except the Note. As of 12/31/14, 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: Any documents associated with servicing or loss mitigation services for FHA-insured mortgages.
• FHA Insurance Claims: 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: The HUD REO Sales Contract and related addenda.
According to the FAQ page about e-signatures, “The document must be presented to the signatory before an electronic signature is obtained. The electronic signature must be attached to, or logically associated with, the document that has been electronically signed.”
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: