The Consumer Financial Protection Bureau (CFPB) is onboard with a recent announcement that will allow lenders to accept electronic signatures on Federal Housing Administration (FHA) mortgage loans.
The Department of Housing and Urban Development (HUD) announced Thursday it is granting lenders the authority to accept more FHA mortgage loans that are electronically signed, rather than traditional pen and ink signed loans.
The announcement has garnered the praise of the CFPB, which believes HUD’s initiative is an “important step toward improving the mortgage closing experience for consumers,” said CFPB Director Richard Cordray.
“Electronic closing process have the potential to reduce errors, limit unexpected surprises, and create more time and opportunity for consumers to review critical documents with the tools they need to make informed decisions,” Cordray said. “HUD’s decision to accept electronic signatures for FHA loans can help jumpstart the move towards a more seamless, paperless, and consumer-friendly process.”
In November 2013, the CFPB finalized its “Know Before You Owe” rule that helps consumers obtain information when they are shopping for a mortgage.
In January, the agency began soliciting public comments on ways the mortgage closing experience can be improved for consumers and lenders alike.
“We commend HUD for taking this important step toward improving the mortgage closing experience for consumers,” Cordray said. “Buying a home is one of the biggest financial decisions most people will make in their lifetimes, but navigating the complicated closing process can be a challenge.”
Written by Jason Oliva