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Question 1 of 4

1. Question
ELECTRONIC SIGNATURES

A lender and borrower execute a mortgage-related agreement using electronic records and electronic signatures instead of paper documents.

Under the ESIGN Act, how are electronically signed contracts generally treated?
- A) Electronic contracts are valid only if later converted to paper form
- B) Electronic signatures may not be denied legal effect solely because they are in electronic form
- C) Electronic signatures are valid only for loans under $100,000
- D) Mortgage agreements may never be executed electronically
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Question 2 of 4

2. Question
ELECTRONIC SIGNATURES

A borrower refuses to sign mortgage disclosures electronically and instead requests traditional paper documents.

What protection does the ESIGN Act provide to the borrower?
- A) Borrowers are required to use electronic signatures for all mortgage transactions
- B) Borrowers may use paper signatures because individuals retain the right not to use electronic signatures
- C) Borrowers may refuse electronic signatures only for adjustable-rate mortgages
- D) Borrowers lose all federal disclosure protections if paper signatures are requested
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Question 3 of 4

3. Question
ELECTRONIC SIGNATURES

Before using electronic records in a mortgage transaction, a lender provides a consumer disclosure explaining the electronic process and obtains the borrower consent.

Why is this disclosure important under the ESIGN Act?
- A) The Act requires a consumer disclosure confirming the consumer consented to use an electronic format
- B) Consumer disclosures are optional if the borrower has internet access
- C) Mortgage lenders may bypass consumer consent for electronic disclosures
- D) Electronic disclosures are valid only if mailed afterward in paper form
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Question 4 of 4

4. Question
ELECTRONIC SIGNATURES

A lender asks a borrower to consent electronically to receive disclosures through an online portal.

What additional requirement applies before the lender may rely on the electronic consent?
- A) The borrower must waive all rights to paper disclosures permanently
- B) The consumer must electronically consent in a manner demonstrating the ability to access the electronic information being provided
- C) The borrower must purchase specialized software approved by the federal government
- D) Electronic consent is valid only if witnessed by a notary public
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