Fannie Mae, Freddie Mac Publish Redesigned Loan Application

Fannie Mae and Freddie Mac yesterday announced publication of their redesigned Uniform Residential Loan Application, the standardized form used by borrowers to apply for a mortgage loan.

The redesign marks the first substantial revision in more than 20 years. Additionally, the government-sponsored enterprises worked together to create a common corresponding dataset, called the Uniform Loan Application Dataset to ensure consistency of data delivery.

But perhaps what is notable is what is not in the revision. A proposed question specifically asking borrowers to indicate their language preference was omitted following strong objections by the Mortgage Bankers Association and other industry trade groups, who said the proposed question would have raised significant compliance and legal issues.

In a letter last month, Federal Housing Finance Agency Director Mel Watt said the question would not appear, saying its inclusion at this time would “not be practical.” However, yesterday’s announcement suggested that a Spanish information version would be available “soon.”

“The publication today of the redesigned Uniform Residential Loan Application represents a significant step in a multi-year effort to update, standardize and enhance the quality of loan information for underwriting single-family mortgages,” Watt said. “Fannie Mae and Freddie Mac have been working in collaboration with lenders, trade groups, mortgage insurers, housing and consumer advocates, technology solution providers, and other federal agencies to ensure that the revised loan application is easier to read, technology enabled and more consumer-friendly. Fannie Mae and Freddie Mac have also conducted extensive usability testing with borrowers and lenders across the country to ensure that the redesigned form achieves these objectives.”

Revisions made to the URLA form and corresponding ULAD include:

–Redesigned format: Improved navigation and organization to support accurate data collection and better efficiency for a more consumer-friendly experience.
–New and updated fields: Capture loan application details that reflect today’s mortgage lending business and support both the GSEs’ and government requirements.
–Clearer instructions: Simplified terminology enables borrowers to complete the loan application with less help from the lender.
–Revised government monitoring information: Incorporates the revised Home Mortgage Disclosure Act demographic questions.

Andrew Bon Salle, executive vice president of single-family business with Fannie Mae, said changes will allow lenders to deliver an easier, more consumer-friendly loan application experience.

“The redesigned URLA allows much greater flexibility than in the past by acknowledging that not all loan applications are the same,” said Samuel Oliver III, Vice President of Single Family Business Transformation Management with Freddie Mac. “It does a great job of capturing new data that aligns with the needs of Freddie Mac, Fannie Mae, and other agencies, eliminating irrelevant underwriting data fields, and displaying information in an easier-to-read format.”

The documents are being published now, in an effort to provide the industry with ample time to become familiarized with the URLA and ULAD updates and plan necessary changes to their systems. Lenders may begin using the redesigned URLA on January 1, 2018. A timeline for required use of the redesigned URLA and ULAD will be established at a later date. More information can be found at

Earlier this year, FHFA floated the idea a proposed question in its redesigned URLA involving a customer’s preferred language. That brought a swift response from MBA and other industry trade groups, which said inclusion of such a question would substantially increase lender costs, expose lenders to potential legal liability, provide an “inferior” means of obtaining and analyzing data and create expectations among consumers “that can’t be met.”

“While we support a range of efforts to ensure that borrowers are well informed during the mortgage process, the inclusion of such a question on the redesigned form raises several serious compliance and legal concerns that strongly weigh against including it on the form or, at the very least, warrant a full vetting through a notice and comment process before its inclusion,” the letter said.

Additionally, 54 members of Congress sent a letter to Watt objecting to the question, saying that FHFA had exceeded its authority.

After further consideration, Watt said last month that while FHFA remains committed to improving access for limited English proficiency borrowers, “unresolved issues” would unduly delay rollout of the new URLA and put the 2018 implementation date at risk. “Consequently, FHFA has decided not to include a question about language preference on the new URLA at this time,” Watt said.