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MBA FHA E Signatures Ltr 06-01-11

MBA FHA E Signatures Ltr 06-01-11

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Published by j mcguire
E-Sign (15 USC 7003 - Excludes Negotiable Instruments)
E-Sign (15 USC 7003 - Excludes Negotiable Instruments)

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Categories:Types, Research, Law
Published by: j mcguire on Jun 03, 2011
Copyright:Attribution Non-commercial

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01/16/2013

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1717 Rhode Island Avenue, NW, Suite 400 | Washington, DC 20036 | www.mortgagebankers.org | (202) 557-2700
May 31, 2011Mr. Robert C. RyanActing Assistant Secretary for Housing - Federal Housing CommissionerUS Department of Housing and Urban Development451 7
th
Street, SWWashington, DC 20024Dear Mr. Ryan:The Mortgage Bankers Association (MBA) respectfully requests that the Federal HousingAdministration (FHA) permit the use of electronic signatures (e-signatures) for all mortgageorigination forms required by the FHA. E-signatures, acceptable under federal law and bythe FHA on certain documents, will help reduce processing issues that impair the home-buying process. E-signatures will reduce the volume of lost paperwork, reduce signaturefraud, reduce the time required to close a loan, and may lead to lower borrower costs. Toaddress these issues affecting the ability of individuals to purchase a home, MBA requeststhat FHA forthwith implement a revised policy accepting the use of e-signatures on all of itsloan documents. MBA and its members stand ready to offer their expertise and resourcesin helping FHA implement any necessary policy changes in a timely manner.Over the past 15 years there has been a trend toward automation of the loan applicationand underwriting process. Most lenders have automated processes that allow applicants toapply online and to supply information to the lender in an electronic fashion. Much of theprocessing is performed by lenders using online processing and underwriting tools. Theordering of appraisals, credit reports and verification of deposit balances is frequentlyperformed by automated, online processes. This automation makes it easier for theconsumer to provide needed data to the lender, reduces the application to closing timetable,minimizes the potential for lost documents, and generally reduces the costs incurred by allparties. Lenders have experienced increased productivity and a reduction in costs afterimplementing internal automated processes.E-signatures would reduce costs for activities such as, printing and mail couriers for bothborrowers and lenders. These benefits eliminate many of the annoyances of a paper-basedprocess, including lost or inconsistent documents. In addition, consumers would havegreater flexibility and convenience within the home buying process because they would nothave to change documents and related signing processes if they changed from aconventional loan to an FHA loan. All of the aforementioned benefits ultimately result inlower costs for the consumer, as lenders pass on savings to remain competitive.Additionally, borrowers experience a more seamless and satisfying homebuying process.Importantly, FHA’s acceptance of e-signatures would align the agency with othergovernment entities, most notably Fannie Mae and Freddie Mac, which have beenaccepting electronic signatures on loan documents for several years. Conforming toaccepted industry standards on all documents would expedite the mortgage process,

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