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Legislators, CUNA Share URLA Concerns with FHFA
Friday, July 15, 2016 6:50 AM

Credit Union National Association met with the Federal Housing Finance Agency on Wednesday to urge the agency to reconsider adding language preference to its Uniform Residential Loan Application (URLA). CUNA previously expressed concerns about the change in a joint letter last month, and this week 55 members of Congress sent a letter to FHFA Director Mel Watt with similar concerns.

The FHFA’s change would add a question to the URLA asking borrowers to indicate their language preference. While the agency has indicated that the question was for data collection and to help servicers in their relationship with borrowers, the language raises numerous concerns for lenders.

CUNA’s June letter raises these compliance and legal concerns, and believes that the changes warrant at least a vetting process before the change is made final. The congressional letter also raises the different ways adding a language preference can mislead consumers and raise complex compliance questions.

The legislators urged the FHFA to exclude any question about foreign language questions from URLA and asked the agency to work with Congress, other federal agencies and stakeholders to develop an “effective, comprehensive approach to limited English proficiency consumers in the mortgage process.”

FHFA said it is considering other options on the URLA language. FHFA alternatives include:

  • Potentially including the language on two Surveys of Mortgage Originators and the American Survey of Borrowers, which will go out next fall and next spring;
  • Issuing a Request for Input or Request for Information that will focus on the best way to get information on language preference;
  • Working with Fannie Mae and Freddie Mac to enhance the tools already in place at the agencies on language preference; or
  • Forming an interagency working group with public input to devise the best solution to this issue.