Fannie Mae and Freddie Mac have published their updated and interactive version of the redesigned Uniform Residential Loan Application. Significantly—as ABA had long urged—the application did not include a question asking applicants to indicate their preferred language. ABA previously raised concerns that the inclusion of a language preference question would likely confuse or mislead borrowers and could carry significant legal implications for lenders.
A set of FAQs included with the new form noted that “the Federal Housing Finance Agency determined that the redesigned URLA is not the appropriate vehicle to collect data on a borrower’s preferred language or information on housing counselling the borrower may have completed.” Rather, it clarifies that the data collected on the URLA is limited to the most relevant and useful information needed to make an underwriting decision, and data that is statutorily required to be collected at the time of application.
The release also provides detailed information about the implementation timeline for the new URLA form. Lenders must begin using the redesigned URLA form on Nov. 1, 2020.