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Disclosures for Mortgage Application Online

Question: 
We are trying to set up mortgage application online. We are having debates on what disclosures we need and how to provide the disclosures. Is it something as simple as sending a PDF or does it require us to follow E-SIGN? If the mortgage is submitted online, do the disclosures need to be sent online?
Answer: 

by Jim Bedsole:

You would need to follow E-SIGN for any of the disclosures other than disclosures required at the time of application. For a mortgage loan, the only disclosure I know of where you would not need to follow E-SIGN is the ARM Program Disclosure and CHARM Booklet if they are applying for an ARM loan. For those ARM disclosures, providing them with the online application in a manner that they cannot bypass them is sufficient. Everything else, you should follow E-SIGN requirements. Just because the application was taken online, however, does not require you to provide the disclosures electronically. You can still send paper if you want to.

Answer: 

by Richard Insley:

Avoid using nebulous terms like "the disclosures" when you're working on a large complex task. In your current project, several laws and regulations come into play and each has its own disclosure scheme. By generalizing, you will confuse the less knowledgeable members of your task force--leading them to think that there is a single one-size-fits-all rule for "the disclosures."

Use a flowchart to assure that nothing falls through the cracks. It will record the full list of regulatory requirements your new online application system must meet, plus the timing, format, copies, retention, and other relevant details. When complete, your flowchart will trace the way through all types of transactions the new system is designed to support.

First published on 06/10/2018

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