GSEs Unveil Redesigned URLA
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae and Freddie Mac published the redesigned Uniform Residential Loan Application (URLA) last week.
The new URLA, known as Fannie Mae Form 1003 and Freddie Mac Form 65, reflect revisions announced in August. The GSEs will publish a fillable PDF version of the redesigned URLA in early 2020.
Changes have been made to the Borrower Information, Additional Borrower Information, Lender Loan Information, Continuation Sheet, and Unmarried Addendum components. The Rendering Design Options document has been updated and reposted to reflect these changes.
The specific changes to the form include:
•Removal of the Language Preference question and the Homeownership Education and Housing Counseling question. This information will instead be collected by a voluntary consumer information form, which will not be part of the URLA form.
•In the Borrower Information, Section 6: Acknowledgments and Agreements, the statement on “Use and Sharing of Information" will be revised to address specific uses of borrower data.
•The Military Service question will be moved to a new section.
•Minor edits for consistency and usability will be made throughout the URLA form.
The removal of the Language Preference, Homeownership Education and Housing Counseling questions has been challenged by a number of nonprofit groups and Democrat senators.
Nearly 20 senators submitted a letter earlier this month to the Federal Housing Finance Agency (FHFA) calling for the agency to rescind those changes.
“We know that many limited-English proficient borrowers experienced language barriers when they tried to get help from their servicers during the Financial Crisis. In some cases, such barriers prevented borrowers from taking advantage of loan modifications for which the borrower was eligible,” the senators wrote.
The letter argues that voluntary forms, such as the one that will now be used to collect this information “are not adequate disclosures.” The senators also claim that lenders will be under no obligation to use the voluntary form, which will lead to disparity in how borrowers are treated. The letter also expressed the concern that the voluntary form may not always remain with the loan file.
Use of the redesigned form was at one time scheduled to begin on February 1, 2020, but a postponement was announced this past June.
The GSEs said they are on track to publish their respective updated automated underwriting system (AUS) specifications and supporting documents in November, and to announce the updated implementation timeline and mandate before the end of the year.
The announcement stated that the GSEs and FHFA will assess the impact of these changes to the timeline and will provide more information about the new implementation dates as soon as it is available.
Mortgage processors and underwriters can send questions or concerns to ULAD@fanniemae.com or ULAD@freddiemac.com.
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
