WASHINGTON—A preferred language question on the government-sponsored enterprises' (GSEs) redesigned Uniform Residential Loan Application (URLA) will now be voluntary instead of mandatory, the Federal Housing Finance Agency (FHFA) has announced.
The FHFA in June delayed the optional use period – set to begin July 1 – of the redesigned URLA and has now also delayed the mandatory effective date, which was February 2020. The FHFA indicated it would work with stakeholders to finalize the URLA form and develop a new implementation timeline; no new date has been announced.
Both CU trade groups have responded to the change.
NAFCU Response
"NAFCU supports efforts to meet the duty to serve requirements to help creditworthy borrowers in underserved communities achieve homeownership," said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. "If included on the URLA, the preferred language question could pose legal and cost-related complications for credit unions and their members, and slow down the home buying process. We appreciate the agency taking time to consider these consequences."
CUNA Response
While CUNA said it supports efforts to ensure borrowers are well-informed during the mortgage process, it believes the language question would raise serious compliance concerns, including creating expectations among consumers that cannot be met, and potentially exposing lenders to liability if the lender is unable to proceed in the borrower’s indicated language of choice.
“We are grateful that the Federal Housing Finance Agency has reconsidered the inclusion of this question after recognizing the numerous compliance and other legal concerns raised by CUNA and other trade organizations,” said Mitria Wilson, CUNA senior director of advocacy and counsel.