With a significant portion of mortgage origination beginning online, congress passed the Electronic Signatures in Global and National Commerce Act in 2000. The law gives the same validity to electronic signatures as standard signatures on a written contract. The law allows for borrowers to attain loans without ever leaving their homes or exchanging documentation between lenders and borrowers. Although the law permits electronic signatures to be deemed valid, certain documentation such as foreclosure notices and foreclosure related documentation is required to be signed through written form.
Each state has specific laws relating to electronic signatures. While some laws vary state by state, what is the same across the board is a similar statement spelling out that a signature, whether hand written or signed electronically may not be denied legal validity due to it being signed electronically. This therefore means electronic signatures are legally equivalent to paper signatures.
Under Section 101 of the Act, it states that individuals have the right to not sign electronically. This means consumers also have the right to sign in person or in paper form if they would prefer.