Are “E-Mortgages” Coming Soon for FHA?

Among technology efforts being pursued by the Federal Housing Administration is the potential for borrowers to e-sign their loans before becoming insured by the agency.

The implementation of new data submissions standards and development of an electronic case binder format are among additional tech efforts under way by FHA, National Mortgage News reports.

The mortgage industry should expect to see more changes in the coming two to three years than have been made over the past 10, Brenda Boldridge, a program support officer for FHA told attendees of the Mortgage Bankers Association Technology conference in Hollywood, Florida, according to the report.

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FHA is working toward new standards that adhere to the MISMO platform, but additionally, there’s work under way for e-submission of FHA loans. 

According to the National Mortgage News report: “The FHA currently supports limited e-signature acceptance and does not permit lenders to originate loans with fully paperless e-notes. Previous efforts to expand its e-signature acceptance have stalled, leaving a wide discrepancy between the technological capabilities of the FHA and GSEs—even as other government entities have embraced e-signatures, like the Internal Revenue Service’s adoption of e-sign for its 4506-T Request for Transcript of Tax Return.”

While e-signing for FHA loans is on the horizon, it may be at least two years before the tech becomes a reality for lenders, the report states. 

“The e-sign and e-closing enhancements would enable the FHA to begin insuring e-mortgages, but won’t go into development at least until the 2015 fiscal year and have not yet been included in the FHA’s budget,” National Mortgage News writes. 

View the full report

Written by Elizabeth Ecker

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  • What is really needed right away is for the HERMIT system to tie into HECM monthly reporting. The latest monthly issue of the HECM Characteristics report is September 2012 and for the monthly Outlook report, January 2013. Normally the Outlook report comes out about 6 to 7 weeks after month end and the Characteristics report about 2 weeks later. But the Outlook report is not just about HECMs; it covers all endorsements and forward mortgage information.

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