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Fannie and Freddie extend URLA implementation timeline
On April 14, Fannie Mae and Freddie Mac issued a joint statement to announce that—due to the Covid-19 pandemic—the effective date of the revised Uniform Residential Loan Application (URLA) and Automated Underwriting Systems—is extended to January 1, 2021. Lenders must begin use of the redesigned URLA by March 1, 2021, and the current URLA will be retired on March 1, 2022. The revised URLA implementation timeline may be found here. Additional URLA information may be found on Fannie Mae’s URLA FAQs web page here, and on Freddie Mac’s URLA web page here.
Additional InfoBytes coverage on URLA can be found here.
GSEs update interactive URLA
On January 29, Freddie Mac and Fannie Mae (GSEs) jointly announced the release of the updated interactive (fillable) pdf version of the Uniform Residential Loan Application (URLA), also known as Freddie Mac Form 65 and Fannie Mae Form 1003. The announcement also identifies a number of supporting documents published in connection with the new URLA, including instructions on how to complete the new form and a list of Frequently Asked Questions. An appendix at the end of the announcement illustrates improvements from the old application to the new application. Additionally, the GSEs have URLA pages on their websites to provide more information (see Freddie Mac’s URLA page here and Fannie Mae’s URLA page here). The effective date for the updated URLA is September 1, and lenders must begin using the new URLA form on November 1.
GSEs publish updated URLA
On October 23, Fannie Mae and Freddie Mac (GSEs) published the updated and redesigned Uniform Residential Loan Application (URLA), which reflects revisions announced in August at the direction of the FHFA, including the removal of the language preference question. (Previous InfoBytes coverage here.) The updated static URLA form and supporting materials can be accessed on Fannie Mae’s URLA web page. The announcement also states that the GSEs are on track to publish their updated automated underwriting system specifications and supporting documents next month and anticipate announcing the updated implementation timeline and mandate prior to year-end. Although the GSEs retired the dynamic version, an interactive PDF version of the redesigned URLA will be released in early 2020.
Democratic Senators rebuke FHFA’s changes to URLA
On October 16, 19 Democratic Senators wrote to FHFA Director, Mark Calabria, requesting the agency to reconsider its decision to remove the language preference question and housing counseling agency information from the redesigned Uniform Residential Loan Application (URLA), which was originally set to take effect on February 1, 2020. As previously covered by InfoBytes, in August, Fannie Mae and Freddie Mac (GSEs) announced, at the direction of the FHFA, that mandatory use of the redesigned URLA will no longer begin on February 1, 2020. Additionally, the GSE’s noted that FHFA is requiring the removal of the language preference question. The question, along with the home ownership education and housing counseling question, will now be a part of a separate voluntary consumer information form. In response, the Senators argue that the decision to remove the language preference question is arbitrary and could leave “loan servicers without basic communication information about their borrowers” as a voluntary information form may not be used or may not travel with the loan documents. The Senators assert that the language information is “vital” to policymakers and the planned revisions to the URLA were “an important step toward increasing language access throughout the mortgage market.” The letter requests that Director Calabria respond to their concerns by November 18.
FHFA delays URLA implementation, removes language preference question
On August 8, at the direction of the FHFA, Fannie Mae and Freddie Mac (GSEs) announced that the mandatory use of the redesigned Uniform Residential Loan Application (URLA) will no longer begin on February 1, 2020. FHFA has directed the GSEs to make specific modifications to the URLA form, including, most notably, the removal of the language preference question. The question, along with the home ownership education and housing counseling question, will now be a part of a separate voluntary consumer information form. The announcement does not provide information on the new implementation dates.
FHFA and the Enterprises release Language Access Plan
On May 10, Fannie Mae and Freddie Mac (the Enterprises), in conjunction with the Federal Housing Finance Authority (FHFA), released a Language Access Multi-Year Plan (Plan), which identifies potential solutions for the obstacles faced by limited English proficiency (LEP) borrowers in accessing mortgage credit. The Plan was developed based on research and testing conducted in 2016 and 2017 to assist the Enterprises and FHFA in identifying the issues faced by LEP borrowers throughout the mortgage cycle. Key milestones for the Enterprises and FHFA for 2018 and beyond include (i) creating a clearinghouse with centralized resources, such as translated mortgage documents; (ii) establishing a language access working group; (iii) developing a disclosure that accompanies the Preferred Language Question on the Uniform Residential Loan Application (URLA) (previously covered by InfoBytes here); (iv) developing glossaries that include mortgage and real estate terms; (v) in addition to Spanish, translating the URLA into additional languages; and (vi) creating a language access line to provide consumers with assistance expeditiously.
FHFA Includes a Language Preference Question in the Universal Residential Loan Application
On October 20, the Federal Housing Finance Agency (FHFA) announced that it would include a language preference question on its updated Universal Residential Loan Application (URLA). The question will allow borrowers to indicate if they prefer to communicate in a language other than English and to identify that language. In response to industry concerns, in the preferred language question text, FHFA includes disclosure language that informs borrowers their response will not negatively affect their application, indicates a preferred language does not mean the lender agrees to communicate in that language, and provides language assistance resources.
FHFA plans to issue the new URLA form later this year, which will go into effect beginning in July 2019. The form will be mandatory for loans made by Fannie Mae and Freddie Mac beginning in February 2020.