In response to the Federal Housing Finance Agency’s recent request for information on how to serve borrowers with limited English proficiency, ABA and three financial and housing trade groups yesterday urged FHFA to pursue a holistic strategy to identify LEP-specific barriers to homeownership and develop cost-effective, practical solutions.
While the associations share the goal of making credit available to qualified borrowers regardless of their language ability, they cautioned FHFA on including a language preference question on its Universal Residential Loan Application form, noting that it could create significant liability for lenders. They added that a number of issues related to LEP borrowers must be resolved before a language preference question can be incorporated into the URLA.
The groups also outlined several principles for assessing the impact of language barriers on LEP borrowers going forward. Specifically, they recommended that FHFA work within the existing legal and regulatory structure; use an evidence-based approach to develop materials that support the most prevalent languages spoken by LEP borrowers; identify and support actions that address the most critical needs of LEP borrowers; ensure that any proposed solutions do not create unrealistic borrower expectations; coordinate actions with relevant stakeholders; and consider the impact to secondary market issuers and investors. For more information, contact ABA’s Joe Pigg.