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WBK Industry News - Federal Regulatory Developments

VA Circular 26-13-13, Addressing the Use of Electronic Signatures in Conjunction with VA Guaranteed Home Loans, Has Been Extended by the Department of Veterans Affairs

VA Circular 26-13-13 clarified that electronic signatures are acceptable for use in conjunction with the VA Home Loan program. The background contained in the base circular stated “The Federal Electronic Signatures in Global and National Commerce Act, commonly referred to as the E-sign Act, was signed into law on June 30, 2000. The E-sign Act provided baseline rules for internet commerce, including nondiscrimination between handwritten and electronic signatures, retention of all electronic records in a similar fashion and duration as would be applicable for a handwritten signature, and the provision of electronic acknowledgment or notarization of online documents when necessary. In addition, the E-sign Act established that no contract or legal document signed online may be denied legal efficacy because it was delivered by an automated program.” VA indicated in the base Circular that “…lenders are not required to use electronic signatures in the course of closing VA home loans; but, if they choose to, they must comply with the E-sign Act, just as they are required to comply with all Federal laws. Failure to comply with any Federal statute could result in denial of guaranty on a particular loan, withdrawal of automatic lending authority, and/or debarment from all Federal programs.”

The initial rescission date for Circular 26-13-13 was January 1, 2015.  Change 1 dated January 7, 2015 extended the rescission date of the basic Circular to January 1, 2017.  Change 2 dated December 12, 2016 extended the rescission date of the basic Circular to January 1, 2019.