As many lenders make the switch from only using pen and paper to accepting electronic signatures, many wonder if these are allowed for VA Home Loans.
The answer is, yes. In the same way people are able to purchase other things using electronic forms and digital signatures, you can also get a VA mortgage electronically with a participating lender.
To that end, the Department of Veterans Affairs published some guidelines to help both borrower and lender understand what’s required and acceptable when using a digital or electronic signature. In VA Circular 26-13-13, the VA addresses the issue:
“The purpose of this circular is to clarify that electronic signatures are acceptable for use in conjunction with the VA Home Loan program.”
Any lender who uses electronic signatures is required to comply with applicable federal laws established in 2000. The Federal Electronic Signatures in Global and National Commerce Act, commonly referred to as the E-sign Act, was signed into law on June 30, 2000. The E-sign Act served to establish baseline rules for internet commerce, including electronic signatures, stating:
- There should be no discrimination between handwritten and electronic signatures.
- All electronic records should be kept for the same amount of time as a handwritten signature.
- There should be a provision for electronic acknowledgment or notarization of online documents when, and if, necessary.
Additionally, the E-sign Act established that electronic signatures will have the same legal standing, stating in the Act that “No contract or legal document signed online may be denied legal efficacy because it was delivered by an automated program.”
While the VA is quick to point out that the use of electronic signatures is NOT mandatory, those lenders who do employ them must comply with the E-sign Act.
If you have questions about this or any other question regarding a VA Home Loan, contact our office today in Joplin, MO.