Quantcast

In 2015, HUD 4000.1 became the new comprehensive FHA loan rulebook for Single Family Mortgage loans and refinance loans. These regulations permit the use of electronic signatures on certain FHA mortgage loan documents provided the signatures and procedures meet FHA standards.

FHA Mortgage Loan Rates

November 23, 2017
FHA Rates for November 23, 2017
Offering 30 Year Fixed Mortgages
Offering 15 Year Fixed Mortgages
Use our mortgage calculators
to see what you can afford!
FHA.com is a private company, is not a government agency, and does not make loans.

Prequalify Now!

Compare mortgage rates for your refinance or home purchase loan.

CHOOSE A LOAN TYPE

then
get
your

FREE CREDIT SCORE

Do you know what's on
your credit report?
The Path to Homeownership
FHA.com is a private company, is not a government agency, and does not make loans.

FHA Loan Articles

News and Updates for Homeowners

Signing FHA Mortgage Loan Documents Electronically

March 1, 2016 - In 2015, HUD 4000.1 became the new comprehensive FHA loan rulebook for Single Family Mortgage loans and refinance loans. We have been examining important sections of the new rules--there have been many changes, updates, and restatements of FHA mortgage loan policy and there are far too many of them for the FHA/HUD to issue comparisons of old versus new policy.

What does HUD 4000.1 say about using electronic signatures on FHA loan documents for new purpose mortgages or refinance loans? The new regulations permit the use of electronic signatures on certain (but not necessarily all) FHA mortgage loan documents provided the signature and procedures used in collecting those signatures meets FHA standards. HUD 4000.1 addresses these requirements, starting with a basic definition of “electronic signature” designed to keep things consistent and standardized:

“An Electronic Signature refers to 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. FHA does not accept an electronic signature that is solely voice or audio. Digital signatures are a subset of electronic signatures.”

This raises an important question--Is the use of an electronic signature legally binding? Once you have electronically signed are you legally obligated (depending on the nature of the documents being signed)?

HUD 4000.1 says that if it meets FHA criteria, the signatures ARE legally binding. “An electronic signature conducted in accordance with the Electronic Signature Performance Standards (Performance Standards) is accepted on FHA documents requiring signatures to be included in the case binder for mortgage insurance, unless otherwise prohibited by law. Electronic Signatures meeting the Performance Standards are treated as equivalent to handwritten signatures.”

FHA loan rules do not require to use electronic signatures, but those who choose to do so must comply with standards listed in HUD 4000.1.

“A Mortgagee’s electronic signature technology must comply with all requirements of the E-Sign Act, including those relating to disclosures, consent, signature, presentation, delivery, retention and any state law applicable to the transaction.”

Here is a list of the documents FHA loan rules currently permit to be signed electronically at the time of this writing:
  • 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. 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 form HUD-27011, Single Family Application for Insurance Benefits.
  • HUD Real Estate Owned (REO) Documents: Electronic signatures will be accepted on the HUD REO Sales Contract and related addenda.
In order to determine whether e-signatures are possible on your FHA loan transaction, discuss the issue with a loan officer. Standards or requirements in this area may vary depending on the lender and/or state law.