The Federal Housing Administration is getting more high-tech. In an effort to “modernize” the agency’s processes, the FHA announced Thursday it is granting lenders the authority to accept more mortgage documents containing electronic signatures rather than documents signed in pen and ink.
The authority extends to e-signatures for origination, servicing and loss mitigation documents; in addition to FHA insurance claims, REP sales contracts and other related addenda, according to FHA. The move will help the agency align with common lending practices, it’s commissioner said in announcing the change.
“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,” said FHA Commissioner Carol Galante. “This extension will not only make it easier for lenders to work with FHA, it also allows for greater efficiency in the home-buying and loss mitigation process.”
The update is effective immediately for single-family loans including reverse mortgages. Lenders are still required to adhere to electronic signature standards including the use of specific technology, quality control and existing practices as outlined by the Department of Housing and Urban Development previously.
The extension of authority around e-signatures has been detailed in a Mortgagee Letter published Thursday by the Department of Housing and Urban Development.
Mortgagee Letter 2014-03 detailing FHA’s extended acceptance of e-signatures is posted on the HUD website.
Written by Elizabeth Ecker