On March 18, Mountain America Credit Union said it became the first financial institution in the U.S. to close a Federal Housing Agency insured loan with e-signatures instead of traditional ink and paper.
"We are now a 100% electronic shop when it comes to loan processing and closing," said Amy Moser, vice president of mortgage services at the $3.8 billion credit union in West Jordan, Utah.
Since 2010, Mountain America has used e-signatures to close conventionally insured mortgages but had to wait for FHA to approve the process, Moser explained.
Closing loans electronically allowed Mountain America to take a process that previously took 45 minutes to an hour to complete and reduce the time to 15 minutes or less, Moser explained. Electronic loan closings also allow the credit union to fund mortgage loans on the same day they close. Previously, borrowers would have to go the credit union or a title company to sign loan documents. The papers would then have to be collected, scanned and uploaded or sent via an overnight delivery service to another location to be scanned.
Now, borrowers visit a website up to 24 hours ahead of closing to review their closing documents and then click a button to accept them. It's only at the closing borrowers provide a web signature for the notary statement and promissory note.
The FHA said it will start accepting these documents electronically later this year. The borrowers also provide an electronic signature that goes to all the previously accepted documents.
"To a lot of people, this can just seem mundane, a simple part of the process that most people forget about a few hours after they finish it," Moser said. "But they don't understand what a difference this can make to member service."Moser recalled the comments of a grateful Realtor after the credit union began closing conventionally insured loans electronically.
"She was really delighted because now, she said, she could schedule closings on Fridays," Moser said. "She had never been able to do that before because of paper's limitations."
Glenn Clements, group president of direct operations for Stewart Information Services Corp., the Houston-based firm that partnered with Mountain America to provide the new electronic service, said the e-loans are pivotal because for the first time ever, one can electronically close an FHA loan on a home purchase and then immediately following that closing, e-close a refinance transaction with an FHA loan.
Mountain America closed nearly 2,700 fixed rate mortgage loans in 2013 worth roughly $413 million, according to NCUA records.
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