New Uniform Residential Loan Application Delayed
Fannie Mae, Freddie Mac delay implementation of first changes to mortgage application in past 20 years
In August of 2016 Fannie Mae and Freddie Mac jointly announced changes to the standard mortgage application form which were to take effect the 1st of February 2020.
Earlier this week, however, the government sponsored enterprises (GSEs) announced the delay of mandatory use of the redesigned Uniform Residential Loan Application (URLA) by lenders as the Federal Housing Finance Agency (FHFA) has requested changes to the proposed form.
At issue are several questions that appeared on the redesigned form. According to the GSEs, the Language Preference question and the Homeownership Education and Housing Counseling question will now be removed from the redesigned URLA form and included on a separate, voluntary form.
The Mortgage Bankers Association (MBA) — a national association representing the real estate finance industry, headquartered in Washington, D.C. and boasting around 2,200 member companies—had opposed the changes.
MBA CEO Bob Broeksmit wrote the Association’s disapproval had stemmed from the “customer relations issues the question would cause if lenders could not actually serve borrowers in their preferred language, and due to unresolved operational and legal questions raided by the language preference information,” in a letter to MBA member.
Beyond the relocation and voluntary status adjustment of those two new questions, the FHFA is also directing the Fannie and Freddie to make changes including:
- In Borrower Information, Section 6: Acknowledgments and Agreements, the statement on “Use and Sharing of Information” be revised to address specific uses of borrower data
- The Military Service question at Borrower Information, Section 1a. be moved to a new section adjacent to Section 7: Demographic Information
- Minor edits for consistency and usability throughout the URLA form
A new start date for the redesigned Uniform Residential Loan Application has not been announced.
“The GSEs and FHFA will assess the impact of these changes to the timeline and will provide more information about the new implementation dates as soon as it is available,” the GSEs said in a bulletin.
Sources: Fannie Mae