Jun 16, 2014

Tip 42-2013: Are Docu-Signatures Acceptable on a Contract?

Are docu-signatures or e-signatures acceptable on a contract? A simple question with a complicated answer.

For traditional transactions, lenders accept contracts with e-signatures. However, if a power of attorney will be used as part of the settlement, docu-signatures are not acceptable. That fact makes sense. With a docu-signature, there is no record of an original signature. As a result, if a power of attorney will be used, make sure to obtain wet signatures on the contract otherwise, there could be a delay in closing. This need for wet signatures also applies for subsequent contract addendums.

For short sales, lenders do not accept docu-signatures. Contracts submitted with docu-signatures are rejected, and approvals are delayed. Accordingly, the best practice with short sale contracts and addendums is to obtain wet signatures from the beginning.

For REOs, the guidelines vary by the investor. For example, HUD will only allow wet signatures in blue ink. The safe practice is to obtain wet signatures from the beginning. For any questions regarding a specific property, contact the listing agent who will know the rules for that specific property.

P.S. Stay tuned for a follow up tip regarding REOs and deposits!
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, VA

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