The Federal Housing Administration and Internal Revenue Service will begin allowing electronic signatures on FHA loan documents and the 4506-T form in 2012, according to the Mortgage Bankers Association.
The MBA said one of its priorities during the past 18 months has been to gain permission for the use of electronic signatures on FHA loan documents and to automate the process for submitting the IRS Form 4506-T—also known as the Request for Transcript of Tax Return.
In an advance copy of a memo to MBA members obtained by Mortgage Technology, the industry trade group said its Residential Technology Forum is providing the FHA and IRS with legal, technical and operational information so the two federal agencies can implement processes to accept electronically-signed documents, which the MBA said reduces processing issues that impair the home buying process.
"They will reduce the volume of lost paperwork, reduce signature fraud, reduce the time required to close a loan and may lead to lower borrower costs," the memo reads. "At this time when the housing market remains fragile, it is important to embrace actions that could result in lower costs for the consumer, more efficient processing of loan applications by lenders and a more seamless and satisfying homebuying process for borrowers."
"We are extremely pleased to share with you that both agencies are working on initiatives to improve these processes," the memo continues. "We currently foresee implementation of these initiatives in 2012."
