Use Of Electronic Signatures Is Long Over Due In The Lending Industry

As much change as the Lending Industry has gone through in recent years, there was still one area that that was not brought into the 21st Century until fairly recently, the use of Electronic Signatures.  In this age of computers and the ability to do things in the blink of an eye, paper & pen in many ways still dominates much of the Lending Industry.  Yes Loan Applications (1003) have been automated, and computerized for a while now.  Loan Applications are now printed and not hand written.  Underwriting has been assisted by the use of Automated Underwriting, ease of obtaining Credit Reports, and obtaining property information.  But the simplest of all the processes is just now becoming Incorporated into the mortgage application process. In my opinion the Use Of Electronic Signatures Has Been Long Over Due In The Lending Industry and I am glad to see it finally being adopted by most lenders. 

It is good to see the mortgage application process finally being streamlined nationwide by the Lending Industry.  I could understand the delay in implementing Electronic Signatures if original signatures were required on Loan Applications or Disclosures, but they are not.

Electronic Signatures speed up the Loan Application Process, and make it much more convenient for everyone involved.  Just about every page of the Loan Application has to be signed as well as almost all of the Disclosures.  Depending on the Loan Product this can easily be 30 to 50 pages, and is very time consuming. A Borrower can spend twice as long signing loan application documents, then they do with the Attorney at the Closing Documents.

Prior to Electronic Signatures if a Loan Originator could not meet with a Borrower face-to-face to sign documents they basically had three choices.

• Print the documents in the order they want them signed and highlight everywhere the Borrower needs to sign, initial, and date.  Then scan and e-mail all the documents by encrypted e-mail, password protected, along with a list of other documents the Borrower needs to send back.
• Print and fax all the documents in the order the Borrower needs to sign and faxed or mail back, along with a list of other documents they  need to provide.  Then follow up on the phone to make sure the Borrower signs, initials, and dates in all the right places.  The reason for the phone call is because highlighting does not always come through on a fax.
• Print all the documents in the order the Borrower needs to sign, highlight all the places they need to sign, initial, and date along with a list of the other documents they need to provide.  Then mail everything to the Borrower by overnight mail, and include a postage paid overnight mail envelope for them to send the documents back.

Electronic Signatures have simplified, improved, and made the whole loan application process much quicker.  Changes that make common sense tend to be adopted very slowly in the Mortgage Industry, but this change has been long overdue and very welcomed.

Electronic Signatures are also very beneficial in the Underwriting and Closing process as well, especially when it comes to meeting time lines for the Loan Estimate (LE), and the Closing Disclosure (CD).  These documents are time sensitive, and the quicker they are signed and returned, the quicker a Closing can take place. 

These are just a few reasons why the Use Of Electronic Signatures Have Been Long Over Due In The Lending Industry.