e-Sign Adoption: 5% of All 4506-Ts Are e-Signed
IRS statistic continues to grow each month, while overall 4506-T volume decreased 26% compared to last year.
Currently, of all 4506-Ts submitted to the IRS, 5% are electronically signed, with the remaining 95% wet signed. Conditions continue to favor e-Signature adoption within the mortgage industry, such as FHA’s acceptance of e-Signed forms at the beginning of the year. With FHA’s approval, HUD eliminated the last hurdle to the “e-Mortgage” gaining wide spread acceptance.
The CFPB is also aiding e-Sign adoption with its new consumer protection rule (TILA-RESPA Rule) going live August 1, 2015. Two new forms are slated to replace the HUD-1, Truth-in-Lending Disclosure (TIL), and Good Faith Estimate (GFE). Those forms are the “Loan Estimate” and “Closing Disclosure”. In addition, the CFPB is requiring that they’re presented to the borrower no later than three business days from closing. e-Signature platforms are uniquely positioned to assist lenders in making that certification to their regulators.
Document management/preparation systems provide lenders the confidence that they are generating the correct set of documents for each of their loan programs, tailored to the borrower. An e-Signature platform presents the documents to the borrower and provides certifications to the lender when the borrower acknowledges receiving, viewing and executing those documents.
Also noteworthy, the IRS observed a 26% decrease in 4506-T volume for fiscal year 2014 when compared to the previous year. Fiscal year 2014’s volume hovered near 15 million 4506-Ts. The IRS processes 4506-Ts for multiple verticals, including mortgage finance, healthcare, credit card, insurance and equipment leasing.
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