E-Signature Use Expanded by FHA

By James Woodard

February 17, 2014 5 min read

Electronic signatures are now being accepted on an increasing number of homebuying and financing documents, including Federal Housing Administration loans.

In its ongoing bid to modernize its processes, the FHA has granted expanded authority to lenders to accept e-signatures on loan documents, it was reported by DS News.

The new policy allows e-signatures on origination, servicing and loss-mitigation documents. Also included are those related to FHA insurance claims and real estate-owned sales contracts.

"By extending our acceptance of electronic signatures on the majority of single-family documents, we are bringing our requirements into alignment with common industry practices," says FHA Commissioner Carol Galante. "This extension will not only make it easier for lenders to work with FHA; it also allows for greater efficiency in the homebuying and loss-mitigation process."

The expanded authority goes into effect immediately for single-family forward mortgages and the agency's reverse mortgage products.

While FHA does not currently accept e-signatures on mortgage notes themselves, the agency says it plans to begin taking them at the end of the year, it was reported.

Q: Are homebuilders getting back to a normal level of activity?

A: The National Association of Home Builders released new figures from their Leading Markets Index, revealing 58 out of approximately 350 metro areas have either returned to or exceeded their last normal levels of economic and housing activity.

The index's nationwide score registered at 0.87, meaning economic and housing activity is running at 87 percent of normal levels.

Q: Will significantly more apartments be built this year?

A: Prospects look good for all types of multifamily construction. The Mortgage Bankers Association projects originations of commercial and multifamily mortgages will grow to $300 billion in 2014, a 7 percent increase from 2013 volumes, and continue to rise to $333 billion in 2016.

Originations of multifamily mortgages are forecast at $116 billion in 2014.

"Early indications are that commercial and multifamily lenders increased originations by 15 percent in 2013," says Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.

"This year will once again see fewer loans coming up against their maturities. But with still-low interest rates, improving property fundamentals, a rebound in property prices, and higher loan maturity volumes on the horizon, we anticipate mortgage originations will continue to increase in 2014."

Q: How many mortgages were delinquent last year?

A: According to year-end data from Black Knight Financial Services, 6.47 percent of the nation's mortgages last year were delinquent, down from a peak of 10.57 percent in January 2010.

Meanwhile, about 2.48 percent of loans were in some state of foreclosure — a rate about 4.6 times the pre-crisis average.

Q: Are home prices continuing to rise?

A: CoreLogic recently released its Home Price Index for December 2013, noting an 11 percent bump since December 2012. Anand Nallathambi, president and CEO of CoreLogic, was optimistic about the future:

"After six years of fits and starts, we can now see a clearer path to a durable recovery in single-family residential housing across most of the United States."

Q: What are the prospects for stronger growth in the housing market in 2014?

A: That depends on the analyst of the situation. For example, here's the view of HSH Market Trends:

"The drumbeat of economic data has become more muted and flat over the last month or so. The latest batch out this week featured several important reports that revealed a more stumbling than steady gait for the economy, contrary to an expected quickening of pace.

"Concern about these changes and the Fed's still-firm commitment to steadily remove supports this year has spooked investors here and abroad. We have seen a significant downturn in equity prices since the calendar turned and a flight-to-safety buy of U.S. Treasuries amid more signals that the global economy lacks traction, while inflation remains muted and of little concern for the foreseeable future.

"In this kind of environment, and with so many challenges evident, it is very difficult for interest rates to firm, but absent true calamity, there are limits on how far they can fall."

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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