*Who Said E-Signatures Aren’t Gaining Traction?*
**By Tony Garritano**
***Electronic signatures are picking up speed. For example, I just heard that Veri-Tax, LLC, a provider of verification and ability-to-pay solutions, has recently partnered with six electronic signature providers to deliver fast, compliant tax transcript requests, which are used by mortgage lenders to verify a borrower’s income when applying for a mortgage loan. Adobe EchoSign, DocMagic, DocuSign, DocuTech, eLynx and eSignSystems (Wave) have all been certified to provide electronic signatures on the IRS Form 4506-T when customers request tax transcripts through Veri-Tax. These certifications allow lenders to continue to leverage their existing e-sign partnerships without needing to make internal changes in order to meet IRS electronic signature guidelines.
****Income verifications through Veri-Tax are a key tool used by lenders to meet the upcoming ability-to-pay rules recently established by the Consumer Financial Protection Bureau. Scheduled to go into effect in January 2014, the new rules will require lenders to show their borrowers have the means to pay back loans.
****Veri-Tax, a participant of the IRS’ Income Verification Express Services (IVES) program, offered a 4506-T electronic signature method by partnering with Adobe EchoSign on January 7, 2013, the day the IRS began accepting electronic signatures. Because the ultimate responsibility of an e-signature’s validity and authenticity falls on each IVES participant, Veri-Tax implemented an e-sign vendor certification process to ensure that the electronic signature providers used by its customers also adhered to the IRS’ electronic signature guidelines.
****“Veri-Tax proactively sought out these key e-sign partners in the mortgage space to reduce the compliance efforts of Veri-Tax customers,” said Maria Kirgan, Veri-Tax’s senior director of product management. “Our ultimate priority at the end of the day is making sure our customers’ internal processes do not become a hindrance to meeting new regulatory requirements in the market, which are really the main drivers of our certification process. Because our systems are flexible and open, we can quickly adapt to industry changes.”
****Veri-Tax continues to expand its e-sign vendor network, which will allow additional customers to use their existing e-sign partners to expedite the income verification process and meet the upcoming ability-to-pay rules before 2014.
****“eSignSystems is excited to be a part of the Veri-Tax community that is committed to providing a more efficient 4506-T process for the borrower and lender,” said Kelly Purcell, executive vice president of Wave’s eSignSystems division. “eSignSystems’ SmartSAFE solution meets all of the eSignature IRS requirements with round trip communications from start to finish of the 4506-T process, ensuring both lender and Veri-Tax (IVES) compliance.”
****Compared to wet signatures, e-signatures have been shown to reduce the 4506-T rejection rates of Veri-Tax customers by more than 10 percent, saving lenders substantial time and money otherwise spent on resubmitting orders. Veri-Tax’s electronic process also eliminates illegibility problems caused by faxing or scanning forms and allows borrowers to verify their personal information, such as their address, before the forms are submitted, thus reducing the largest reason for a 4506-T rejection.
****“When e-signatures are utilized, our quality control process is condensed into seconds. Since every form is validated for completeness before submission, we are able to send the order to the IRS within a few minutes of a borrower’s signature,” said Charles Young, Veri-Tax senior director of operations. “Using one of our certified e-sign partners’ solutions reduces our customers’ operational costs, and more importantly, expedites the income verification process.”
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at email@example.com.