Fannie Mae and Freddie Mac say that proposed changes to the standard mortgage application form may be delayed.
The changes to the Uniform Residential Loan Application form were announced three years ago and due to come into effect from February 1, 2020. But the new form could now be delayed, as the Federal Housing Finance Agency has requested changes be made to the proposed URLA form. The agency is said to have taken issue with concerns raised about Language Preference and Homeownership Education and Housing Counseling questions, which will now be removed from the redesigned form and included in a second, voluntary form.
The language question was opposed by the Mortgage Bankers Association due to what it said would be “customer relations issues” that would be caused if lenders are unable to server borrowers in their preferred language. It also said there could be operational and legal questions to consider.
Meanwhile, the FHFA is also said to be asking for additional changes to the redesigned form. It wants a section called “Use and Sharing of Information” to be revised to address more specific uses of borrower’s data. It also proposed that a military service question be moved to a new section under “demographic information”.
Fannie and Freddie are yet to announce a new date for the revised URLA to come into effect, but say the delay will give industry participants more time to make the necessary changes.
The changes will be the first to the standard mortgage application form in 20 years.