The latest in a series of changes promised by the FHA have been released with good news for real estate professionals and potential borrowers alike. The FHA now accepts electronic signatures, specifically DocuSigns, on documents associated with mortgage loans instead of documents only signed with the pen and ink variety.
The widely anticipated change will make it easier and more convenient for those involved in closing home loans. This new policy piggybacks off of the earlier Mortgagee Letter 2010-14, which only allowed eSignatures on third party documents not controlled by lenders. The new Mortgagee Letter 2014-03 allows eSignatures on servicing, origination, loss mitigation, FHA insurance claims, REO sales contracts and other related documents.
FHA Commissioner, Carol Galante stated, “By extending our acceptance of electronic signatures, we are bringing our requirements into alignment with common industry practices. This extension will not only make it easier for lenders to work with FHA, it also allows for greater efficiency in the home-buying and loss mitigation process.“
PEMCO Limited has welcomed this news wholeheartedly as the new process will give a larger number of borrowers the opportunity to get to the closing table, permeating our goals for owner occupancy. PEMCO is currently working out the details with HUD to put the eSignature feature in place and have it available as soon as possible. We will be announcing in the near future our roll-out date for this new development.
The extension of authority regarding e-signatures has been covered in detail in a Mortgagee Letter published on Thursday January 30, 2014 by HUD. This Mortgagee Letter 2014-03 can be found at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee