MBA Call to Action Urges FHFA to Withdraw Question on Limited English Proficiency

The Mortgage Bankers Association’s Mortgage Action Alliance issued a Call to Action, urging members to contact the Federal Housing Finance Agency on a controversial proposed question on Limited English Proficiency in loan applications.

On May 25 FHFA issued a “request for input” to get public views “on issues faced by qualified limited English proficiency (LEP) borrowers to learn more about the procedures and tools that loan originators, servicers and other parties in the mortgage lending process presently employ to assist LEP borrowers, to identify existing requirements, including laws and regulations that guide practices for interacting with LEP borrowers, and to better understand the challenges in effectively servicing this population.”

As part of this info-gathering, FHFA said it would consider a question regarding on a borrower’s “preferred language” on the Uniform Residential Loan Application that all GSE borrowers or their lender must complete.

While MBA strongly supports efforts to expand homeownership opportunities, it cannot support is the possibility that FHFA would put a question regarding a borrower’s “preferred language” on the URLA.

“We believe that inclusion of such a question would be premature and potentially harmful to a lender or servicer’s relationship with their customer,” said MBA Senior Vice President of Legislative and Political Affairs Bill Killmer. “The borrower might have expectations about service in another language that a lender or servicer cannot provide, or a borrower might erroneously believe the lender intended to discriminate against them or otherwise treat them differently. Neither outcome is consistent with the type of customer service we know MBA members strive to provide.”

Killmer noted a year ago, MBA and other industry groups were able to convince FHFA to focus on developing resources and guidance to assist LEP borrowers before putting this question on the form. “However, it appears that FHFA is contemplating doing so again, despite many issues and potential risks that remain unaddressed,” he said.

While MBA will submit its own response to this RFI, it asked MAA members to submit their own letter.

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