Court Wins Set Important Precedent for Paperless Mortgages
Two recent court rulings affirmed that lenders can enforce electronically signed and transferred notes, laying important groundwork for wider adoption of electronic mortgage technology that could improve the customer experience for borrowers and save lenders and servicers a bundle.
In separate foreclosure cases in New York and Florida, judges ruled that the electronic transfer histories of loans originated with e-signatures proved the plaintiffs had standing to foreclose. This should help put to rest many of the concerns held by investors about buying loans secured with e-notes, and suggests further clarity may have to come from case law."The regulators in this area have been reticent," said Margo Tank, a financial services attorney and partner with BuckleySandler LLP who specializes in electronic signatures. "The courts are going to be leaders in the electronic records and signatures space. It should give a lot of comfort to the mortgage industry."At stake is lenders' willingness and ability to leverage paperless mortgages to slash manufacturing costs and loan production cycles at a time of rising origination costs and complex regulatory compliance challenges that can only be accomplished through automation - not to mention growing borrower demand for a tech-infused mortgage experience that the Consumer Financial Protection Bureau is eager to bring to bear with electronic closings. Read More Here.