A2-4.1-03, Electronic Records, Signatures, and Transactions (12/13/2023)

All documents used to originate, service or modify a loan, may be generated, signed, processed, stored or transmitted electronically, provided they are capable of reproduction in paper format except:

• the promissory note and any related addenda (unless the seller has received special approval to deliver electronic notes (eNotes));

• any unrecorded ink-signed originals of documents that modify or supplement the security instrument; and

• assignments for MERS-registered loans when MERS is not named as nominee.

The following table describes Fannie Mae’s requirements for electronic records. An electronic record is a contract or other record that is created, generated, sent, communicated, received, or stored by electronic means. A record is information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

For purposes of the preceding table, “electronic records” do not include eNotes, and paper notes may not be converted into eNotes. See  B8-8-02, Requirements for Creating, Closing, and Correcting eNotesB8-8-02, Requirements for Creating, Closing, and Correcting eNotes for additional information regarding electronic records.

Sellers/servicers may use any form of electronic signature on an electronic record that is valid under applicable law (except that audio and video recordings cannot be used as the electronic signature), as long as the signature is attached to or logically associated with the record intended to be signed. From time to time, Fannie Mae may require a seller/servicer to use a specific signature format for a particular electronic record or type of record.

The following table describes Fannie Mae’s requirements for electronic signatures.

See  B8-8-01, General Information on eMortgagesB8-8-01, General Information on eMortgages for information about electronic signature requirements for eMortgage transactions.

Fannie Mae accepts delivery and servicing of loans with electronic documents, including security instruments or mortgage loan modification agreements that have been electronically notarized, either in person or remotely using real-time, two-way audio/video communication. Electronic notarizations (including remote online notarizations) may be used with eMortgage transactions as long as the notarization is

• performed in accordance with and is legally valid under the laws and regulations of the state in which the notarization is performed at the time it was performed; and

• in compliance with the Uniform Electronic Transactions Act, as adopted in such state, and the Electronic Signatures in Global and National Commerce Act.

A lender may not require a borrower to use remote notarization and must have other notary options available for borrowers upon request.

A remote online notarization is an electronic notarization where the person whose signature is being notarized and the notary are in different physical locations and are communicating via two-way audio-visual conferencing, the signatures are provided electronically, and the notarial seal is applied electronically.

In addition to the above requirements, the following requirements apply to remote online notarization:

All selling representations and warranties continue to apply, including those related to

• clear title and first lien enforceability;

• compliance with laws and responsible lending practices, and

• requirements regarding title insurance, including those in B7-2-04, Special Title Insurance Coverage ConsiderationsB7-2-04, Special Title Insurance Coverage Considerations.

In addition to the above requirements, the subject property must be in a state in the following table:

*For a subject property located in California, a remote online notarization may be taken by a notary outside of the State of California in accordance with the laws of the state in which the notarial act was performed. However, a California notary may take a remote online notarization for a subject property located in California only upon and after the trigger provision of the law that permits the use of remote online notarization by California notaries is activated, and only in compliance with that law.

If the subject property is not in a state listed above, loan documents notarized using remote online notarization will be permitted if the state

• adopts a law that expressly permits the use of remote online notarization, or

• accepts (either through state law or through the application of an express federal law) remote online notarizations performed out-of-state in accordance with the laws of the state in which the notarial act is performed.

Electronic records may be delivered and electronic signatures may be provided by the seller, servicer, or Fannie Mae (or by a third party, when one is involved) as part of a transaction between them.

Every seller/servicer consents to the use of electronic records and signatures in its transactions with Fannie Mae and intends to be bound by the electronic signatures of its representatives as if they were ink signatures on paper.

The following table describes Fannie Mae’s requirements for electronic transactions with Fannie Mae.

When a seller/servicer electronically engages in a mortgage transaction with a borrower, the seller and the servicer must fulfill all requirements of Section 101(c) of ESIGN to create a binding electronic record or a binding electronic signature with a consumer. Each seller/servicer must retain evidence of its compliance with this requirement.

Under no circumstances may a borrower be required to use electronic records and electronic signatures. For a borrower who chooses not to use electronic records and electronic signatures, the seller/servicer must continue to provide and accept all such documents on paper.

When the servicer issues any disclosure electronically, the individual mortgage loan file also must include evidence of:

• any required disclosures made before obtaining the borrower’s consent,

• the borrower’s consent to receiving subsequent disclosure electronically, and

• evidence of how the servicer “reasonably demonstrated” the borrower’s ability to receive the disclosures for which the consent was provided.

The servicer must not electronically issue a notice of default, acceleration, repossession, foreclosure, eviction or the right to cure to a borrower.

The seller/servicer is required to retain a copy of an electronically executed sales contract, if applicable.