Feds Consider Adding Default Docs to Electronic Signature Act.

Now under evaluation by the federal government is the question of whether notices of housing foreclosures, repossessions and defaults should be given legal standing if sent out in electronic form.

The Electronic Signature in Global and National Commerce Act of 2000 currently allows documents and contracts (others than those specifically excluded from the law) to have legal standing if they are in electronic form or sent through electronic transmission.

In 2000, Congress required the secretary of Commerce to evaluate over a three-year period whether documents excluded from the law should remain excluded. Adding foreclosure, repossession and default notices into the ESIGN Act could give lenders the ability to use electronic mail to send such notices, which under current laws are considered invalid if they are sent through this delivery system.

The National Telecommunications and Information Administration, Washington, is currently receiving public comment on this issue. The deadline for comment submission is Jan. 14, 2003. The NTIA can be reached through its website at www.ntia.doc.gov. Top mortgage industry leaders strongly oppose having these three servicing notices added to the current law.

"We have not reviewed any proposal or other material addressing this issue, but we do not support changing the law to give legal effectiveness to notices of default, acceleration, repossession, foreclosure, eviction or the right to cure provided in electronic form," said Patti Boerger, a spokesperson for Freddie Mac, McLean, Va. "We believed that such notices should continue to be on paper and be delivered by the U.S. mail system or other permitted delivery service," she added.

John A. Richards, associate general counsel at Fannie ...