When a loan originator takes a loan application online, when must they obtain signatures from the borrower?

The requirement for a loan originator to obtain signatures from a borrower as soon as possible reflects the importance of ensuring that all parties involved in the transaction are in agreement with the terms of the loan. Obtaining signatures early in the process establishes a clear understanding and consent from the borrower regarding the loan application and the information provided therein. This practice can help minimize misunderstandings or disputes later in the process, facilitating a smoother transaction.

In contrast, waiting until the end of the processing time could lead to complications if the borrower decides they no longer agree with the terms or if there are discrepancies that arise after the application is already in motion. Additionally, signing before submission for processing is crucial, as the signing is an acknowledgment of the information contained in the application, which should be collected promptly to avoid any delays. Lastly, stating that it is not necessary to obtain signatures during the online process overlooks the essential regulatory and practical steps that protect both the lender and the borrower in the lending process.