The Federal Housing Administration revealed that it will permit lenders to begin approving electronic signatures on mortgage loan documents. The FHA will accept the e-signatures on third-party documents, including sales contracts and some other documents not handled by the lender. This also includes REO sales contracts.
The brand-new policy is effective instantly.
“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,” explains FHA Commissioner Carol Galante. “This extension will not only make it easier for lenders to work with the FHA, it also allows for greater efficiency in the homebuying and loss mitigation process.”.
The FHA says it considers the approval of e-signatures will help streamline the loan origination process and help decrease document submission period for debtors who are looking for options to avoid foreclosure too.
As part of this new policy, the FHA will not yet approve e-signatures on the mortgage note on its own. However, the FHA says it arranges to accept e-signatures on mortgage notes at the end of the year.