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Fannie, Freddie Debut New Mortgage Application Form

Mortgage financing giants Fannie Mae and Freddie Mac released a redesigned mortgage application form this week, after the agency that oversees them ordered a change to remove certain questions over language preferences and housing counseling information from the previous version.

The Uniform Residential Loan Application is a standardized form used by borrowers when applying for a mortgage. This is the first time in 20 years there has been a change to the standard mortgage application form.

The process to update the URLA form has faced several delays over the past year.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, ordered that a language preference question and housing counseling information be moved to separate voluntary forms.

The Mortgage Bankers Association and some other groups had raised an issue over the forms 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,” MBA President and CEO Bob Broesmit wrote in a letter to its members earlier this summer.

However, some lawmakers are concerned about language preference and housing counseling information now being collected separately and voluntarily through a different form.

The separate form “could reduce access to mortgage financing for limited-English proficient mortgage-ready home buyers and lead to serious financial repercussions,” a group of nearly 20 Democratic 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 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.

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

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