Digital Signatures are Treated Like The Plague

There’s no helping the banking community out of their pit of ignorance.  (Sorry, was that too much editorialization?)  Let’s rewind.  Banks structure their organizations such that each department is completely oblivious to each other, and moreover, the way business is done in the real world.

E-mail.  Digital Signatures.  E-mail.  Did I mention E-mail?

Digital signatures have been legal for a long time, and we use them every day to ratify contracts between two parties.  In the case of a short sale, the bank’s involvement goes no further than a contingency on the contract.  They aren’t a party to the transaction.  They aren’t liable for anything that has to do with the sale of the house.  They aren’t involved in any of the details of the sale of the house, AT ALL.

What they ARE involved in is the settlement of debt for which the house has been pledged, which has nothing to do with the agreement between the buyer and the seller.

So why is it then, that many banks are rejecting contracts that are legally ratified between a buyer and a seller because of the “type of pen” that was used.  Face it, digital signatures are a modern replacement for pen and paper (which, by the way, is extremely easy to scan, photoshop, and forge.)  It’s much more difficult to forge a digital signature than it is to forge a handwritten signature.

So the question goes out to all of you out there in the banking world.  Why, if you aren’t a party to the sales contract, are you rejecting offers that are completely legal, just because you didn’t like the method by which it was made legal?

Comments are welcome here.  :)

Dear FHA, Can You Please Sign Off?

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Dear, David H. Stevens, Margaret Burns, and Bonnie McCloskey,

Nothing is more infuriating than a policy within a company that cannot be explained other than “that’s the way we’ve always done it.”

Digital signatures save everyone time.  A VERY LARGE AMOUNT OF TIME.  But in a world where a vast majority of the buyers are going FHA, with a policy that doesn’t allow digital signatures, many lenders are slowing us all down by requiring pen to paper.

Here’s why pen to paper is a stupid idea.  PHOTOSHOP.  I can extract your signature and drop it into any document I want and pass it off as genuine and it instantly becomes legitimate.  Not only can I do this, but I have done this, but only after receiving written permission to do so from my client.  No funny business here.

It’s been my only solution to FHA’s antiquated practice of requiring pen to paper.

Digital signatures have been part of the business world since 2000 and they’re perfectly legal.  There’s no reason we should be chasing people down, inconveniencing them, to acquire handwritten, less-than-secure forms of authentication.  It’s just ludicrous.

So, FHA, please stop this horribly annoying practice and bring yourselves up to speed.  We’re tired of the whole world moving faster than you, and you’re just getting further and further behind.  Drop the dead weight.  Loose the anchor.  Run like the wind and allow services like @Docusign to usher us into a world that should have existed 9 years ago.

Sincerely,

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