FHA Changes Electronic Signatures Policy
April 14, 2014
The FHA has announced it would accept electronic signatures (also known as “e-signatures”) on several FHA home loan documents. The new policies are found in detail described in FHA Mortgagee Letter 14-03.
The mortgagee letter explains that a wide variety of FHA loan products will accept e-signatures for many steps in the FHA loan process. Borrowers may find that a traditional signature is still required on some important FHA loan documents, at least at the time of this writing.
According to FHA Mortgagee Letter 14-03, “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.
“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.”
FHA e-signature policy changes went into effect immediately upon the issuance of the mortgagee letter. For more information on using e-signatures, speak to your loan officer or contact the FHA directly.
The mortgagee letter explains that a wide variety of FHA loan products will accept e-signatures for many steps in the FHA loan process. Borrowers may find that a traditional signature is still required on some important FHA loan documents, at least at the time of this writing.
According to FHA Mortgagee Letter 14-03, “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.”
“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.”
FHA e-signature policy changes went into effect immediately upon the issuance of the mortgagee letter. For more information on using e-signatures, speak to your loan officer or contact the FHA directly.
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