Many of us have been following and anxiously awaiting a decision by the Utah Supreme Court regarding the challenge of the legal validity of electronic signature for government ballots which relied heavily on Utah’s version of the Uniform Electronic Transactions Act (UETA). I have read many differing and varying opinions from legal experts, blogs, tweeters, etc. but we can all stop speculating because the ruling on June 22, 2010 confirmed the validity of the collected eSignatures established new precedent.
What this decision does, is open the door for wider implementation of electronic signatures by government and businesses that have been slower to adopt this type of technology because of legal concerns. As stated by David K. Isom yesterday in a great blog post, Electronic Signatures Come of Age: From Elections to Commerce and Beyond, “The Utah decision resolved many of the fundamental issues presented by UETA, and resolved them in a way that energizes UETA. UETA will have a broader application in states that follow Anderson than most commentators would have predicted.”
I’m sure we’ll be seeing the positive effects of this decision. With the recent decision by the FHA to accept eSignatures on 3rd party documents and a preliminary decision by the North Carolina State Bar for the use of SaaS products as long as reasonable care” is taken to minimize risks to the “confidentiality and to the security of client information and client files, it appears that technology and products like eOriginal’s eSigantures solutions will be playing a greater role and making a wider impact on the way in which government and businesses handle their online transactions.
Wells Fargo Funding has approved eOriginal as an Authorized eSignature and eDelivery Vendor. eOriginal’s SmartSign Web can be used by brokers, real estate companies and correspondent lenders to manage borrower’s electronic disclosure statements. Using eOriginal’s eCore® platform, lenders can have borrowers electronically review, sign and return disclosure documents from the eOriginal hosted signature service or from eCore embedded within their own website. SmartSign Web® can be integrated with existing loan origination systems to automate the eDisclosure process. This ESIGN and UETA compliant delivery capability not only eliminates paper from the process, it speeds the closing cycle while eliminating costly rework and improving regulatory compliance.
Recent congressional amendments to Truth in Lending Act (TILA) known as the Mortgage Disclosure Improvement Act of 2008 (MDIA) have been included in a final rule amending Federal Reserve Regulation Z. Known as the “3/7/3 Rule”, these amendments went into effect July 30, 2009 and have a significant compliance impact on the operations of home loan lenders, mortgage and real estate brokerages, title and real estate agents, and others in the loan process. The new 3/7/3 Rule provides consumers defined time periods to review disclosures from their lenders. While the amendments provide additional protections to the consumer, they may postpone their closing date and the ability to receive funding for their mortgage on the day they originally planned for closing.
3 Days – Delivery of the initial TILA disclosure.
The initial Truth in Lending Statement must be delivered to the consumer/borrower within 3 business days of the receipt of the loan application by the lender. The TILA statement is presumed to be delivered to the consumer 3 business days after it is mailed to the consumer.
Faster Delivery. The Rule allows for delivery of the TILA statement by electronic communication or e-mail under the requirements of the Electronic Signatures in Global and National Commerce Act (”E-Sign Act”), 15U.S.C. 7001 et seq., provided that the lender can provide “evidence of receipt” of the mortgage loan disclosure by the consumer. eOriginal SmartSign® Web electronic signature and vaulting solution enables lenders to reduce the delivery time from 3 days to the same day by electronically delivering the mortgage loan disclosures in real time and capturing evidence of receipt by the consumer.
Quicker Fee Collection. For the lender, the Rule prohibits collection of any fee, including those for applications or appraisals, other than a bona fide credit report fee reasonable in amount, until the initial TILA disclosure is delivered to the consumer. However, lenders “may impose such fees anytime after the consumer actuallyreceives the early mortgage loan disclosure”. By enabling lenders to deliver the initial TILA disclosure as soon as it is available, eOriginal SmartSign® Web digital signature and valuting accelerates the ability of lenders to collect the fees necessary to actually begin the loan approval and closing process. e.g., appraisals, surveys, reports, etc. even to the same day as the application.
7 days from Initial Disclosure – Mortgage Closing Waiting Period.
The Rule prohibits the lender and consumer from closing or settling on the mortgage loan transaction until 7 business days after the delivery or mailing of the TILA disclosures, including the Good Faith Estimate and disclosure of the final Annual Percentage Rate (APR), even when all parties are prepared and desire to do so.
Quicker Closing. Surpassing the presumption of delivery of the disclosures 3 days after mailing, eOriginal SmartSign® Web again accelerates the ability to close by enabling lenders to deliver the initial TILA disclosure as soon as it is available,
3 Days prior to Mortgage Closing – APR Waiting Period.
The Rule also requires the lender to provide the consumer with an accurate APR at least 3 business days before closing. This applies when the APR changes more than .125% from the APR previously disclosed. If the APR changes again in the 3 day period more than the .125%, another delivery of disclosure and 3 day waiting period begins.
Quicker APR Cure. Again surpassing the presumption of delivery of the redisclosures 3 days after mailing, eOriginal SmartSign® Web accelerates the ability to close by enabling lenders to deliver the TILA redisclosure as soon as it is available,
Mortgage Closing Costs Savings Beyond Just Quick.
Shortening the distance from application to closing, electronic transmission and delivery of disclosures streamlines the workflow process, assuring both the consumer and the lender of the timeliest closing. Of course, there are dramatic benefits to electronic delivery of the disclosure documents in addition to the ability to reduce the time lines. There are cost and expense reductions from the preparing and copying the disclosures, the mailing or overnight courier fees, the cost of staff for tracking and follow up of the delivery and possible fines that may accrue for delayed closings.
There are different twists in the application of the MDIA depending on the type of financing being considered, e.g., closed end home mortgages or home equity lines of credit, and there are many compliance aspects to consider in addition to the delivery of disclosures. eOriginal provides solutions to assist in compliance with the delivery thresholds so as to enable the commencement of the mortgage loan process as soon possible and to assure that delivery requirements will not delay mortgage closing any longer than possible under the Rule. eOriginal SmartSign® Web enables compliance with the eSignature requirements of the E-SIGN Act and provides the “evidence of receipt” of the mortgage loan disclosure by the consumer required by MDIA. eOriginal has enabled the secure, verifiable delivery of mortgage and other financial industry documentation for over a decade.
Baltimore, MD (Vocus/PRWEB) – August 6, 2009 -eOriginal, Inc., a leader in enabling end-to-end paperless transactions, announced today that Pioneer Services, the Military Banking Division of MidCountry Bank, has joined eOriginal’s high-level financial institution client list and is using the electronic signature and vaulting solution of SmartSign® Web and eCore® On Demand. Transactions for Pioneer Services will now be executed electronically and managed throughout their lifecycle within the eCore® electronic vault.
“eOriginal’s electronic signature solutions go beyond document generation and basic electronic signatures” said, Samantha Moritz, eOriginal’s director of sales and marketing. “In addition to electronically signing each loan transaction, eOriginal ensures that each signed document is authenticated and protected using digital signatures to create tamper-evident seals around all documents placed under the control of the electronic vault. Important documents may be maintained in an authenticated electronic format for their full legal life.”
Once the contracts are electronically signed, eOriginal’s vaulting technology creates a digitally sealed audit trail for the complete lifecycle of each deposited document. This secure audit trail provides the highest level of non-repudiation of the evidentiary record for events such as access, signing, reuse, print, or view requests by any user or external system. Actions affecting admissibility or enforceability including new versions, additional electronic signatures, assignment, and custody transfers – are tracked and permanently recorded in the audit trail.
The resulting document is a legal, tamper-proof eContract that eliminates the need for any physical paper processing. The eContracts are true electronic finance documents that are tamper-evident, auditable, legally enforceable, admissible, and negotiable. eOriginal electronic signature and vaulting solutions are also compliant with ESIGN, UETA and UCC Revised Article 9-105.
For additional information on the news that is the subject of this release (or for a demonstration), contact John Jacobs at 410-625-5149, or visit www.eoriginal.com.
About eOriginal
eOriginal, Inc. provides advanced electronic signature and vaulting solutions which enable organizations to eliminate paper while legally protecting their assets as Electronic Original® documents are managed and transitioned throughout their lifecycle. eOriginal technology and processes create legally binding electronic signatures and electronic documents that are tamper-evident, auditable and legally enforceable. eOriginal technology provides compliance for managing electronic signatures and transferable records under E-Sign, UETA and the UCC. eOriginal customers, including top-tier financial institutions, have processed more than 5 million electronic signatures on documents without a single system error or legal challenge.
About Pioneer Services
Pioneer Services, the Military Banking Division of MidCountry Bank, provides financial services and award-winning education to members of the Armed Forces. For more than 20 years, Pioneer Services has been a leader in military lending, offering military loans and award-winning financial education programs through a network of offices and on the Internet. Pioneer Services is proud to support military families and communities through a variety of partnerships, programs, and sponsorships. For more information, visit PioneerServices.com.
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