Required Signatures

Question: We are having a debate about required signatures. There are customer signature lines on most disclosure and application forms, but some of our loan officers say that signatures aren't really required. Which mortgage disclosure documents actually require a customer's signature?

Answer: First, it never hurts to get signatures. Examiners like to see signatures because it constitutes proof in their eyes that the customer actually received the disclosures. Of course, it doesn't constitute any kind of proof that you gave a form to the customer to keep. But examiners feel good about signatures anyway.

That being said, most of the required disclosures do not actually require the consumer's signature. The actual list of required signature documents is quite short. Most of the required signature documents are part of RESPA's Regulation X. The transfer of servicing notice must be signed by the customer. Any Affiliated Business Arrangement referral notice must also be signed. Both are supposed to be signed when given, however HUD has acknowledged that the Transfer of Servicing notice may be signed as late as closing when the documents are mailed to the customer and the lender can't control when the customer signs and returns them. The model form for the Good Faith Estimate contains a signature line, however the regulation does not specifically require the applicant's signature. As noted above, the signature does tend to please the examiner so it's not a bad idea, but it isn't strictly necessary.

Other regulations don't contain specific signature requirements. The notice required by Regulation B to advise the customer of a right to a copy of the appraisal has no signature requirement. In fact, the notice isn't necessary if you simply give the applicant a copy of the appraisal without making them ask for it.

Regulation Z doesn't contain signature requirements either. You simply give the information to the applicant. This is true for early disclosures and ARM and HELOC disclosures as well.

Similarly, for Flood Hazard Insurance, if the property improvements are in a flood hazard zone you must send a notice to the applicant and keep a copy of the notice in the file. There is no requirement for the consumer's signature, however.

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 7, 7/01