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Uniform Loan Application Updated – First Time in 20 Years

The form most buyers use when their loan will be backed by Fannie Mae or Freddie Mac will no longer include language preference or home counseling questions.

WASHINGTON – Mortgage financing giants Fannie Mae and Freddie Mac released a redesigned mortgage application form after the agency that oversees them, the Federal Housing Finance Agency (FHFA). It ordered them to remove certain questions over language preferences and housing counseling information.

The Uniform Residential Loan Application (URLA) is a standardized form used by borrowers when applying for a mortgage, and it’s the first time in 20 years there has been a change.

The language preference question and housing counseling information has been moved to separate and voluntary forms.

The process to update the URLA form has faced several delays over the past year, in part because the Mortgage Bankers Association and other groups raised an issue that prompted the changes.

“MBA opposed the inclusion of the language preference question in the URLA because of 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 raised by the language preference information,” said MBA President and CEO Bob Broesmit in a letter to members earlier this summer.

However, some lawmakers worry about having a separate form for collecting the language preference and housing counseling information.

A separate form “could reduce access to mortgage financing for limited-English proficient mortgage-ready homebuyers and lead to serious financial repercussions,” a group of nearly 20 senators wrote in a statement about the changes. “Voluntary forms are not adequate disclosures. Lenders will be under no obligation to use the new, voluntary form, and it is unclear how many will elect to do so. This will result in disparate treatment among borrowers who use different lenders.”

A detailed description of each change made in the URLA form is available online. Fannie Mae and Freddie Mac will publish an interactive PDF version of the redesigned URLA and expect to have it online by early 2020.

Fannie and Freddie say they’ll announce an updated timeline for lenders to implement the new form by the end of the year.

Source: Fannie Mae/Freddie Mac and “Fannie Mae, Freddie Mac Unveil New Mortgage Application Form,” HousingWire (Oct. 24, 2019)

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