The Consumer Financial Protection Bureau has selected the $3.9 billion Mountain America Credit Union in West Jordan, Utah, for its eClosing three-month pilot study beginning later in the year.
The eClosing program would allow borrowers to review and/or sign documentation electronically.
"For most consumers, closing a mortgage is the most substantial and complex financial transaction they will ever make, which can often lead to confusion and anxiety," Mountain America CEO Sterling Nielsen said. "By participating in this pilot program we hope to improve the mortgage closing experience and help consumers feel empowered to play an active role in a more efficient closing process."
The eClosing pilot program is part of the CFPB's "Know Before You Owe" mortgage initiative, and is being coordinated with the introduction of new required TILA/RESPA mortgage disclosure forms. However, the CFPB said the pilot program is not considered part of the formal rulemaking process. The final TILA/RESPA rule takes effect August 2015.
"In accordance with the new 'Know Before You Owe' rule, documents in the transaction are available online for the parties of the transaction to review and approve ideally three days before closing – creating more informed buyers and sellers and avoiding any surprises at the closing table," Mountain America said in a press release.
"Mountain America implements a hybrid process that combines both legally operative electronic signatures with wet signatures for the mortgage note," the release also said.
Amy Moser, vice president of mortgage services at Mountain America, said the credit union was the first to use e-signatures for an FHA loan.
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