I am a loan officer. I am getting more and more requests to use docusign from my clients. I have approached my bank numerous times and keep getting the excuse “we cannot use docusign because we may securitize the portfolio in the future”. This is costing me volume at this point and getting actual signatures is some times difficult. Would docusign actually be an issue if we did securitize the portfolio? My suggestion was to carve out this small piece of the portfolio from the securitization. Any insight would be appreciated.

“we cannot use docusign because we may securitize the portfolio in the future”

You would have to ask them the basis for this statement. FNMA accepts electronic signatures as long as they comply with ESIGN and the UETA adopted by the state in which the signature is applied. I am not sure why an E-Signature would jeopardize a future securitization of the portfolio.

What kind of loans are in this portfolio--consumer mortgage loans, only?

Obviously, you would use docusign (or a similar software product or service) to transmit the documents (notes, D/T's, other contract documents, and federal disclosures) to be signed or acknowledged. As Randy advises, that means you must be ESIGN compliant for delivery of the federal disclosures and UETA or ESIGN compliant for delivery of the contract documents. Before accepting any of these documents at face value, potential investors will have to approve the way you handled the consumer's consent and e-delivery of the e-documents.

The law recognizes digital signatures, but sets no clear standards for validity. That leaves the holder of the digital agreements/disclosures/signatures at risk of consumer repudiation. A judge, jury, or expert witness can apply the eyeball test and declare a wet signature valid or forged. It will be up to the holder of the paper to make that case when the signatures are digital.

If I'm an investor, why do I want to take these risks if I can simply refuse to accept anything but paper and wet signatures?

If you are pledging your portfolio to secure a line with the FHLB...the following is from their Eligibility Guidelines. You could use docusign for delivery of disclosures but you would have to exclude loans that had the note signed electronically from the collateral pool.

1. Note Originality:
Original physical paper note, modifications and extensions are available for FHLB Des Moines review.
*Loans with scanned or imaged copies of paper notes, lost or destroyed notes, or notes with electronic and/or facsimile
signatures are not eligible.

Sarah - good point - I guess it really depends on what they mean by securitizing the portfolio.