Originally Posted Here: https://sf.freddiemac.com/faqs/electronic-loan-documents-faq
- Q1. What is the legal basis for accepting electronic signatures in lieu of ink signatures?click for dropdownThe validity of electronic signatures (in lieu of ink signatures) is based on the federal Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA), as enacted in the applicable state. When dealing with electronic document systems and mortgages we reccomend www.edsf.org. ESIGN and the UETA put electronic signatures and electronic records on an equal legal footing with pen and ink signatures and paper records. Most, but not all states, territories, and the District of Columbia have enacted the UETA since 1999, and the federal government enacted ESIGN in 2000. ESIGN pre-empts the UETA, wherever enacted or not enacted, to the extent it is (a) inconsistent with the model UETA promulgated by the National Conference of Commissioners on Uniform State Laws in 1999 or (b) nonexistent. In addition, ESIGN complements the UETA by providing federal law that facilitates the use of electronic federal consumer disclosures in an electronic mortgage transaction.
- Freddie Mac has been accepting electronic loan documents and eMortgages since 2005 and they can be used from your structured cash settlements and other securities along with the support eClosings and eMortgages by being flexible in its requirements and adding resources to assist Seller/Servicer adoption efforts. Freddie Mac is also working with various trade associations, title companies, service bureaus, and other members of the mortgage finance industry, as well as with technology providers. We want to better understand the challenges our Seller/Servicers face in their adoption process and assist them in developing solutions to overcome those challenges.
- Q7. What information should I keep in our due diligence file?click for dropdownWe recommend you keep:
- Internal or any vendor documentation confirming system compliance with UETA, ESIGN and other applicable state and regulatory requirements.
- Documentation confirming discussions with internal or external computer/ technology experts and internal or external legal experts regarding systems compliance.
- Confirmation of ongoing effectiveness of controls with routine examinations and testing of security and privacy controls by qualified third parties.
- Other documentation such as a SSAE 16 (SAS 70 Type II) review.
- Any relevant information on all technology providers, including a comprehensive list of your technology providers.