It never ceases to amaze me how arrogant and backwards some lenders are. Some think they’re business is so different, so complex as compared to other industries. At it’s core, it’s not. It’s all about buying and selling. So why can’t lenders embrace e-signatures, after all most other industries have?
In my last blog I commented that several vendors are fleshing out their services to be e-mortgage ready. They realize that lenders need to be more efficient and the e-mortgage is the height of efficiency. And as regulation settles, lenders will have to turn to automation to comply.
Sounds logical, right? Well, in response to that blog it was said that e-mortgages would be great, but the legality of e-signatures still has to be proven. Why? ESIGN and UETA are there and e-signatures are done everyday. So, why is the mortgage industry so special that e-signatures are legal and binding everywhere else, but they’re not in mortgage?
I used two different types of e-signatures yesterday and in both cases I don’t think I can get out of paying because I consented. First, I paid my telephone bill online. I didn’t write a paper check, sign it and mail it out. In fact, I didn’t sign anything in the traditional sense. I opted to pay my bill online, I was presented a letter to read, I clicked the “I Agree” button and it was done. From there Verizon electronically took their money out of my checking account. Wasn’t that legal? I can’t sue Verizon and get my money back, can I? I paid for a service, the money was taken and I continue to get that service.
Yesterday I also used an e-signature to fill up my car with gas. In this case I used a credit card. The clerk presented me with a ad that I actually signed with a stylus. Again, I don’t think I can question the legality of the transaction because I agreed to pay for a service and I got that service. This method may make lenders more comfortable because the consumer is still physically signing something, but really both e-signing methods detailed here are equally legally enforceable.
So, I ask skeptical lenders, why won’t you embrace e-signatures? Why is a mortgage transaction any different as compared to buying gas or paying for your phone bill? Sure, a mortgage is a larger transaction, but I don’t think the law stipulated that only transactions under $100 can be e-signed, unless I’m mistaken. Lenders have to reinvent themselves in order to survive this crisis. E-signing is not reinvention though, it’s just keeping up with the times. So will lenders do the same old, same old, or will they step up and get with it?
