In an effort to overcome some of the obstacles in the way of limited English proficiency borrowers, the Federal Housing Finance agency has released a new Language Access Multi-Year Plan that lays out potential solutions.
The plan follows a request for input issued by the FHFA last year, on the issues facing borrowers with limited English proficiency.
The FHFA said the idea is to better serve this demographic, in line with regulations which dictate that the mortgage servicers Fannie Mae and Freddie Mac must identify the major obstacles for LEP borrowers and come up with solutions to help them.
Fannie Mae and Freddie Mac developed the Language Access Multi-Year Plan based on research and feedback over the previous year. Its publication coincidentally comes less than a month after a major study from researchers at the Urban Institute found that those in the U.S. with lower levels of English proficiency are significantly less likely to be homeowners than fluent English speakers. The study didn't identify why that is the case, but concluded that limited English speaking ability is likely to be a huge barrier to many borrowers, due to their limited access to information.
The plan proposes several solutions, including the creation of a “clearinghouse” that will provide a centralized library of resources to help lenders, services and counselors serve LEP borrowers. There will also be resources made available to LEP borrowers themselves, the FHFA said.
The plan also calls for the establishment of a Language Access Working Group made up of representatives from the housing industry and consumer groups, which will provide the FHFA with its insights and experiences relating to LEP borrowers.
For LEP borrowers themselves, the FHFA says it will setup a “Language Access Line” where they can call to obtain assistance from housing counselors in their preferred language.
The FHFA also intends to create translated glossaries that will play a foundational role for improving language access by establishing common terminology that will facilitate standardized translations for all other documents. Finally, it will also develop a translated disclosure that will be made available for use by lenders and servicers so they can explain how mortgage transactions are conducted in English, and that lenders are not necessarily able to provide, or agree to provide, communications in the applicant’s preferred language.