From the LSAC site:
Can the recommender fax the letter to LSAC?
No, a faxed image is not clear enough to be added to your file.
I called LSAC to clarify, and told them that I had requested my LORs and asked my recommenders to fax them before reading that this was no longer acceptable. The representative said that they would not be accepted, that the recommenders will have to mail them, and that I will need to get in contact with all recommenders to let them know the letters must be mailed.
Just wanted to let you guys know to save you any trouble.