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Mortgage

Fannie, Freddie revise mortgage app form for first time in 20 years

Available as early as January 2018

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

Here is the joint release from the government-sponsored enterprises on the topic.

"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,” FHFA Director Melvin Watt.

“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,” Watt said. “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.”

The revisions marketed the first substantial revisions made to the form in over 20 years. The 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, Freddie Mac vice president of single family business transformation management.

"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," Oliver said.

The changes reorganize the layout and make it easier for consumers to understand. Fannie and Freddie also worked together to make a common corresponding dataset called the Uniform Loan Application Dataset in order to enable consistency of data delivery.

“The redesigned URLA is the result of extensive collaboration with industry stakeholders,” said Andrew Bon Salle, Fannie Mae executive vice president of single-family business.

“We are proud to be a part of this effort that enables lenders to better serve their customers by providing ease and clarity to borrowers during the loan origination process,” Bon Salle said.

Fannie and Freddie published the documents now in order to provide the industry with enough time to become familiar with URLA and ULAD and plan to make changes to their systems.

The redesigned URLA will become available to use on January 1, 2018. The date where lenders will be required to use the new documents, however, has yet to be set.

"Although final implementation of the new loan application is still more than a year away, and the application must still undergo "safe-harbor" review by the Consumer Financial Protection Bureau, we anticipate that publication of the redesigned form now will give the industry ample time to analyze and prepare for its use in 2018,” Watt said.

Some of the revisions made to the loan application include:

Redesigned format: Improved navigation and organization that will 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.

Spanish informational version: Will be available soon.

The redesigned URLA comes as the result of extensive collaboration with lenders, technology solution providers, mortgage insurers, trade associations, housing advocates, borrower groups and other industry participants. Additionally, Fannie and Freddie worked with the FHA, VA, RHS, U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau.

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