Consumer Banking and Payments Law: 11.7.5.1 DELETED—Introduction
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Consumer mortgage transactions are increasingly conducted electronically. Both E-Sign and UETA were designed to create a legal infrastructure that encourages electronic commerce, including electronic mortgages.
In early 2014, HUD specifically approved electronic signatures for FHA mortgages.612 HUD’s instructions for the use of electronic signatures include numerous protections to ensure that the mortgagor—the homeowner—intended to sign the actual document to which the electronic signature is attached, and that the document cannot be changed after this signature is attached. The instructions contain the following:
In April 2014, the Consumer Financial Protection Bureau (CFPB) released a report about mortgage loan closings that included concerns raised by industry members and consumers about the problems they experience with the current paper application and closing process.616 “Consumers face a daunting package of closing documents that is too large to absorb and too difficult to understand.”617
E-Sign provides that, notwithstanding any statute, regulation, or other rule of law, a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form, and a contract may not be denied legal effect, validity, or enforceability because an electronic signature or record was used in its formation.24 For example, a contract may meet a statute-of-frauds requirement and be legally binding even if it is based on email communications.
Section 7003 of E-Sign139 excludes certain important consumer notices from its coverage. However, when a state’s adoption of UETA does not also expressly do so, the question is raised as to whether these notices can be supplied electronically by virtue of the state UETA.
A consumer’s proof that a transaction was primarily for personal, family, or household purposes is complicated where the collector is collecting from someone who was never involved with the debt—where the collector has mixed up the obligor’s identity or the consumer is an identity theft victim. The consumer has no knowledge of the debt, and so cannot testify from personal knowledge as to the purpose of the underlying transaction.
The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.
The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts…349