Real Estate Marketing & Beyond
Fannie Mae and Freddie Mac say their redesigned mortgage application form came into effect last week. The new form removes certain questions over applicant’s language preferences and housing counseling information.
The Uniform Residential Loan Application is a standardized form that needs to be completed by most borrowers when they apply for a mortgage. Last weeks’ update is the first change to the form in almost 20 years.
The changes to the form came about after the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, ordered that a question about language preference and housing counseling information be moved to separate, voluntary forms.
However the changes were delayed as the Mortgage Bankers Association and other groups raised concerns over it.
“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,” MBA President and CEO Bob Broesmit wrote in a letter to its members earlier this summer.
Still, some lawmakers say they’re concerned that language preferences and housing counseling information will now be collected separately, and on a voluntary basis only.
The worry is that the separate form “could reduce access to mortgage financing for limited-English proficient mortgage-ready home buyers and lead to serious financial repercussions,” according to a group of almost 20 Democratic senators. “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 that will be fillable online of the redesigned URLA in early 2020.
The GSEs also will announce by the end of the year an updated timeline for lenders to implement the new form.
