Loan packages sent to the Federal Housing Administration for endorsement can now include some documents with digital signatures — a move that the agency says is the first of many to digitize government lending. The change also impacts reverse mortgages.
In Mortgagee Letter 2010-14 issued today, the U.S. Department of Housing and Urban Development said it will now accept electronic signatures on third-party documents included in FHA case files. The move is intended to make the process easier for borrowers and faster for lenders.
The housing agency defined third-party documents as “those that are originated and signed outside of the mortgagee’s control, such as a sales contract.” An indication of the e-signature and date should be clearly visible when the document is viewed digitally.
The change was made in accordance with Electronic Signatures in Global and National Commerce Act and the Uniform Electronic Transactions Act.
“This is just the beginning of FHA’s commitment to use more electronic documents in our loan approval process,” FHA Commissioner David Stevens said in a statement. “Over time, we will be expanding the number and types of documents with electronic signatures which will be acceptable to FHA.”
HUD said the policy change is effective immediately on forward mortgages and home-equity conversion mortgages.
