Scotsman Guide - August 2010 Residential Edition

Prepare for E-Signatures

Software solutions can ready brokers for HUD changes regarding ink-free documents

The U.S. Department of Housing and Urban Development (HUD) began accepting electronic signatures on third-party documents this past April. The change applies to documents “originated and signed outside the mortgagee’s control.” It does not yet pertain to disclosure documents and loan applications originated by brokers, however.

New e-signature guidance on these documents could come as soon as this fall, according to a HUD memo this past spring.

Wider acceptance and use of e-signatures by HUD and the Federal Housing Administration (FHA) could represent a significant development, and they could help brokers save time and money.

Brokers can prepare for this shift by looking at e-signature technology. The following six features represent some of the most-important attributes in any e-signature-technology solution.

1. Compliance with the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA): These acts represent prerequisites for legal e-signatures. Their standards determine whether an e-signature will stand up in court. Ask software salespeople if their products are ESIGN- and UETA-compli-ant. There should be no doubt about these fundamental requirements.

2. Compliance with the Gramm-Leach-Bliley Act: Consumer-privacy protection is critical, and violations can expose you and your lenders to legal liability.

Make sure any e-signature solu-
tion you consider protects the non-
public personal information in your
disclosures, universal loan applica-
tions and other signed documents
in a compliant manner. All steps
should be encrypted. E-signature
vendors should provide not only the
signature but also a fully encrypted
delivery solution.

For example, if they don’t know where to place signature tags on documentation, you could fail to obtain necessary disclosure signatures or initials.

6. Integration with your loan-origination system: The easier it is to integrate e-signature technology with any system you already are using, the more convenient you likely will find e-signature implementation.

Mortgage brokers working with FHA loans might be allowed — or even required — to use e-signatures soon. Software can ease the transition and should facilitate compliance. It also should lead you to faster closings, lower overhead and better customer service. •

Adam Calvery is president of the mortgage-solutions division for a la mode inc., headquartered in Oklahoma City. Founded in 1985, a la mode is a leading provider of mortgage, real estate and appraisal-tech-nology solutions. The company’s SureDocs e-signature software ( SureDocs.com) has applied more than 3. 3 million signatures. Reach Calvery at adam.calvery@alamode. com or (800) A-LA-MODE (252-6633).

hen it comes to your broker partnership,
nothing is more important than trust. A
lot of mortgage companies promise to take care of
you, but red tape, loopholes and other challenges
often get in the way. You work hard for your
money and you deserve what you earn. At CRL,
integrity is everything. We have high standards
and expect the utmost integrity and quality from
our Branch Managers and Loan Officers.

;

In turn, you can expect more from us. We make sure you are paid on time and in full. We make sure your W2 expenses are reimbursed. We make sure to be there when you have questions and need support. After all, when you do things the right way, fingers never have to be crossed.

• Over 100 lenders in nationwide network
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