E-signatures for real estate contracts OK'd by FHA
The Federal Housing Administration recently announced it will now accept E-signed third-party documents – including real estate contracts.
The news come from the chief legal officer of the company that spear-headed an industry wide effort to move the FHA to formally recognize E-signed third-party documents. The FHA decision will help streamline the sale and financing of homes across the country, Ken Moyle of DocuSign said.
"FHA’s lack of guidance was not at the forefront of anyone’s mind a couple of years ago when the agency was only involved in two percent of home loans," Moyle writes on the DocuSign blog. "But the collapse of financial markets in late 2008 catapulted FHA into the mortgage spotlight almost overnight."
The last time FHA released formal guidance on e-signatures was in 1996.
"As the new #1 source of funding for nearly half of first time home buyers in 2009, FHA’s inability to articulate a clear process for accepting electronically processed documents became a very real problem for those who depended on the agency as a downstream partner," Moyle writes. " In fact, in early 2009 we saw some major FHA lenders retreat from their progressive policies toward e-commerce, as they waited for a signal from FHA."
An April 8, 2010-dated FHA mortgagee letter is the first in what is expected to be a series of responses to this initiative. It essentially says (and DocuSign confirms) it’s now official: E-signed third-party documents, including real estate contracts, are now being accepted by the FHA.