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FHA Moves to Accept E-Signatures
The Federal Housing Administration announced that it will allow lenders to start accepting electronic signatures on mortgage loan documents. The FHA will accept the e-signatures on third-party documents, such as sales contracts and other documents not controlled by the lender. This also includes REO sales contracts.
The new policy is effective immediately.
“By extending our acceptance of electronic signatures on the majority of single-family documents, we are bringing our requirements into alignment with common industry practices,” says FHA Commissioner Carol Galante. “This extension will not only make it easier for lenders to work with the FHA, it also allows for greater efficiency in the homebuying and loss mitigation process.”
The FHA says it believes the acceptance of e-signatures will help streamline the loan origination process and help reduce document submission time frames for borrowers who are seeking options to avoid foreclosure too.
As part of this new policy, the FHA will not yet accept e-signatures on the mortgage note itself. However, the FHA says it plans to accept e-signatures on mortgage notes by the end of the year.