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.  :)