HUD to Accept Electronic Signature on Select Documents

A recent hot topic in the mortgage industry in the last few weeks has been about the acceptance of electronic signatures.  There has been much debate over the use of these.

On April 8, 2010, HUD issued a mortgagee letter clarifying it's position on this topic.  According to the announcement, "FHA will begin accepting electronic signatures on third party documents originated and signed outside the lender's control, such as real estate contracts." 

Electronic signatures will still not be allowed on any document that comes from the lender.  This includes the loan application and all associated disclosures including the FHA/VA Amendatory Clause and the Real Estate Certification forms.  HUD still requires actual signatures on all of these documents. 

Prior to this annoucement, there had been a tremendous push back from the Secondary Market regarding the use of electronic signtures.  HUD issuing a formal stances should clear up some of those issues,