The Right Way to Get Borrowers' Consent to E-Sign

As the mortgage process becomes more and more digital, we all want borrowers to electronically receive and sign disclosure documents.

After all, it makes the overall mortgage process quicker and easier for all involved. However, obtaining the borrower’s consent to electronically receive documents must be done in a particular way to ensure compliance.

Problem

We’ve noticed that an increasing number of partners are asking borrowers for consent to e-sign, but they are not asking correctly. Specifically, partners are asking borrowers to physically sign a piece of paper stating that the borrower consents to receive and sign documents electronically. Or, partners are sending out disclosures electronically prior to obtaining the borrower’s consent.

Solution

The E-Sign Act requires that you send the e-sign consent request electronically and that you receive consent from the borrower electronically as well. By sending the consent request electronically and the borrowers confirming their consent in the same way, it proves that the borrowers can access information in electronic form.

Don’t forget: obtain consent electronically and then send the disclosures to them electronically. Don’t put the cart before the horse.

Key Takeaways

• E-consent must be obtain before sending electronic disclosures
• E-consent must given electronically, not in a physical or oral format
• Ensure your electronic records can be reproduced for later reference as this may be subject to audit by investors, regulators, etc.
• Ensure your electronic consent disclosure includes the required statements and information references in the E-Sign Act.

Thank you for your help in making the mortgage process more efficient!