INTRODUCTION
OVERVIEW
The adoption of the Uniform Electronic Transactions Act (“UETA”) in most states and the passage of the federal Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) (15 U.S.C. 7001 et seq.) in 2000 validated the use of electronic records and signatures for transactions in or affecting commerce, such as mortgage lending. These laws establish requirements and standards that must be followed in order to use electronic signatures, contracts and records to satisfy any statute or regulation requiring that such information be provided in writing. In order to use electronic signatures, contracts, and records, however, a consumer must affirmatively consent to such use and must not have withdrawn such consent prior to use.
Neither the E-Sign Act nor the UETA dictate the type of electronic technology a lender must use to create enforceable electronic mortgage documents. Further, these laws do not require private parties to use or accept electronic records or electronic signatures.
There are a number of requirements that both parties to a transaction must fulfill in order to attain compliance with the electronic signatures laws.
The purpose of this Electronic Signatures Policy (the “Policy”) is to implement consumer protection mechanisms to prevent Rosegate Mortgage, LLC (the “Company” or “Rosegate”), its employees, third-party service providers, and consumers from violating the E-Sign Act. This Policy provides an overview of the Company’s general compliance requirements with regard to electronic signature and delivery laws. The procedures and guidelines set forth in this Policy represent the minimum requirements under current applicable statutory and regulatory guidelines. Wherever local regulations are stricter than the requirements set out in this Policy, the stricter standard shall apply.
The Company believes the use of electronic disclosures and e-signatures will substantially reduce the time and cost of originating, servicing and selling mortgages and consumer loans into the secondary market. The E-Sign Act assists in simplifying and improving consumer experience by providing disclosures and other information to our consumers in a more timely and user-friendly fashion. Notwithstanding this, the Company recognizes the inherent risks associated with participating in electronic delivery practices and accepting electronic signatures. The Company requires its employees to be vigilant in implementing and monitoring compliance of this Policy and in verifying a consumer’s identity.
APPLICATION AND MANAGEMENT
CONSUMER CONSENT COMPLIANCE
The Company adopted the following six-step Consumer Consent Process to ensure compliance with the E-Sign Act’s consumer compliance requirements:
Step 1 – Availability of Paper Delivery or Paper Copies
Provide the consumer with a clear and conspicuous statement of any right or option to have the record provided in non-electronic form, the right to withdraw that consent, the consequences of withdrawing consent (including terminating the relationship), and any fees imposed in the event of withdrawal. In addition, inform consumers of their right to request a paper copy of any electronic forms or record and whether any fees apply.
Step 2 – Consent Choices
Provide the consumer with a clear and conspicuous statement whether the consent relates to a particular transaction only or whether the consent relates to broader categories of information.
Step 3 – Consumer Actions
Provide the consumer with a clear and conspicuous statement of the procedures to withdraw consent at a later date and to update the consumer’s contact information, such as notifying the Company when or if the consumer’s e-mail address changes.
Step 4 – Hardware/Software Requirements
Provide the consumer with a clear and conspicuous statement detailing the hardware and software requirements to access and retain electronic records.
Step 5 – Affirmatively Consent
Obtain the consumer’s consent in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent.
Step 6 – “After Consent” Disclosure
Provide the consumer with a new statement in accordance with Step 4 whenever changes in the hardware or software requirements create a material risk to the consumer’s right to access or ability to retain electronic records, or the right to withdraw consent without incurring a fee, or an imposition of any fees for such withdrawal.
ENSURING COMPLIANCE
COMPLIANCE STANDARDS
To avoid compliance risks related to maintain providing electronic services and making changes to electronic products, services and delivery methods, the Company implemented the following internal controls:
Withdrawal of e-consent by a consumer shall not affect the legal effectiveness, validity, or enforceability of electronic records provided or made available to that consumer in accordance with the E-Sign Act prior to implementation of the consumer’s withdraw of consent. A consumers withdraw of consent shall be effective within a reasonable period of time after receipt of the withdraw by Rosegate.
8. Delivery and Receipt of Electronic Documents:
Before the presentation or execution of any electronic documents, Rosegate will electronically present an E-Sign Consent disclosure to the consumer and obtain the consumer’s electronic consent to the terms of the E-Sign Consent disclosure.
Rosegate will follow federal, state, agency, and investor permissions for eligible electronic documents. Not all loan documents are permitted to be electronically signed. Currently, most investors only permit initial disclosures to be eligible for electronic delivery and signature. Most investors do not allow for electronic signatures on final loan disclosures and documents. These types of documents typically include Deeds, Mortgages, Notes, Borrower Authorizations, Power of Attorney, and documents that require a Notary signature. Rosegate maintains a list of our secondary market partner’s E-Sign eligibility requirements and restrictions.
Purchase Contracts and Appraisals that are electronically executed are acceptable. Rosegate will take reasonable steps to determine that the purchase contract is validly signed by the correct parties in all required places. Because the signing of the purchase contract and appraisal occurs outside of the loan transaction, Rosegate is not required to comply with the provisions of the E-Sign Act for these documents.
9. Electronic Signatures:
Under state and federal law electronic signatures on documents are recognized as valid as they are executed utilizing electronic signature means. Rosegate approves and utilizes electronic signatures from consumers, with proper consent except when prohibited and/or not recommended by a specific program or investor. Rosegate accepts electronic signatures as any electronic sound, symbol, or process attached to or logically associated with a contract or record and executed or adopted by a person with the intent to sign the record. The E-Sign Act grants most electronic signatures the same legal status as handwritten signatures. Rosegate in accordance with the regulation, does not accept an electronic signature that is solely voice or audio, as those means do not meet HUD guidelines.
10. Intent to Sign:
Before a consumer electronically signs a document, Rosegate verifies the consumer has the intent to electronically sign by informing the consumer:
Rosegate complies with the above requirements by:
Rosegate’s suite of security policies, including Information Security and Privacy Policies extend protection of the security of data associated with electronic signatures and the integrity of records. Rosegate has processes in place to ensure that industry-standard encryption is incorporated to protect consumers' electronic signatures and the integrity of the documents to which they are attached. Any modifications to document(s) must be documented for auditing purposes, which will show all modifications and when they were made to the document(s).
12. Record Retention:
Rosegate will electronically maintain all documentation and records pertaining to any transaction as required by all Federal and State law requirements., including the E-Sign Act. At a minimum, electronic records: (i) accurately reflect the information contained in applicable contracts, notices or disclosures; and (ii) are accessible to all persons legally entitled to access for the period of time required by applicable law and in a form that is capable of being accurately reproduced for later reference.
In addition, Rosegate will retain copies of all vendor agreements and that vendor’s backup for any E- signing platforms utilized. This is a mandatory step in order to ensure that we maintain the ability to verify a customer’s signature even if Rosegate no longer uses the vendor, or the vendor is out of business. Rosegate will retain this technology in such a way that, upon request, we can produce legal evidence of the borrower’s consent to participate in electronic document delivery and electronic signature use in a form that is capable of being accurately reproduced for later reference, whether by transmission, printing or otherwise.
13. Electronic Signature Exemptions:
The E-Sign Act has a section that exempts a contract or other record to the extent it is governed by any notice of “default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual.” Due to this exemption electronic documents in these areas are excluded from the Act and electronic signatures on these documents are not given legal validity and effect. To comply with this exemption, Rosegate requires all documents related to default, acceleration, repossession, and foreclosure to be provided in paper and will not allow electronic signature of these documents.
14. Policy Training:
All personnel will receive training related to The ESign Act either in person or through Rosegate’s training system.
*Rosegate Mortgage, LLC is not the servicer of your loan. We are part of the team working with your servicer, ServiceMac, LLC, to continue providing support for your mortgage.