FHFA Announces Mandatory Supplemental Consumer Information Form Use
The Federal Housing Finance Agency announced Fannie Mae and Freddie Mac will require lenders to use the Supplemental Consumer Information Form as part of the application process for loans that will be sold to the Enterprises.
The SCIF collects information about the borrower’s language preference, if any, and on any homebuyer education or housing counseling the borrower received so lenders can better understand borrower needs during the home buying process.
Specifically, the changes announced Tuesday will require lenders to present the SCIF questions to borrowers and to report any data collected from the SCIF to the Enterprise purchasing the loan. Lenders will be required to adopt these changes and reporting requirements for loans with application dates on or after March 1, 2023. Response by borrowers to the preferred language question in the SCIF will remain voluntary.
“Collecting language preference and housing counseling information provides mortgage applicants with an additional method to inform lenders of their needs, enabling the industry to more fully respond to the nation’s growing diversity,” said FHFA Acting Director Sandra L. Thompson. “These steps will contribute to an equitable housing finance system that welcomes all qualified borrowers.”
Consumer Financial Protection Bureau Director Rohit Chopra welcomed the announcement. “As those lenders and financial companies that already collect the language preference of applicants and borrowers know, this information allows lenders to serve their customers better,” he said. “The collection of applicants’ language preference does not violate the Equal Credit Opportunity Act or its implementing regulations.”
The SCIF will be available via Mortgage Translations this summer. Created by FHFA, Fannie Mae and Freddie Mac, Mortgage Translations provides resources to assist lenders, servicers, housing counselors and others in helping mortgage borrowers who have limited English proficiency. The site contains documents and resources available in English, Spanish, traditional Chinese, Vietnamese, Korean and Tagalog.