MBA Leads Effort to Redirect Limited English Proficiency Question on Uniform Residential Loan Application

Following a Federal Housing Finance Agency request for input on issues faced by borrowers with limited English proficiency, the Mortgage Bankers Association and other associations raised serious concerns about proposals to add a “Language Preference” question to the Uniform Residential Loan Application.

In a letter, MBA and the affiliated groups urged FHFA and the GSEs to resist any premature placement of a question until several operational challenges and potential legal/compliance concerns are addressed.

Separately, MBA also contacted FHFA last week and asked the agency to release any other studies and testing on the Limited English Proficiency issue. FHFA responded to that request on Friday and released additional information summarizing results of consumer testing on the LEP issue.

The report suggested that when consumers are asked for their language preference as part of the loan application, some believe that the lender will be capable of providing translation services through the rest of the transaction, while others express concern that the information will be used against them.

The study validated some of the major concerns MBA has raised with FHFA. FHFA has reopened the comment period until September 1. MBA’s LEP working group continues to believe that LEP borrowers would be better served if the FHFA and CFPB focus instead on developing more and better translation resources and establishing a clear compliance safe harbor for how to help LEP borrowers. Introducing an LEP question into the mix now undermines progress on these more important steps.