The New Uniform Residential Loan Application (URLA)

In 2016, Fannie Mae and Freddie Mac (the GSEs) published a newly revised URLA. The new form updates the information to be collected from borrowers, including the new Government Monitoring Information (GMI) data on race, ethnicity, and gender of borrowers to be collected under the revised Home Mortgage Disclosure Act (HMDA) rules. The new GMI data must be collected for mortgages where creditor action is taken on or after January 1, 2018. 

Overview:

  • The URLA has not been materially changed in more than 20 years.  Revising the form was identified as a priority by the Federal Housing Finance Agency (FHFA), and at least the GMI portion of the form required change because of the new HMDA rule. 
  • The redesign process took several months and included consultation with other federal agencies, lenders, consumers, vendors, and trade associations-including MBA.
  • At the request of MBA and other trade associations, the form was shortened for borrowers by separating out material that could be provided by applicants from material that should be provided by lenders.
  • The GSEs added and removed fields based on changed requirements, updated the language to make the form easier to understand, increased the font size, and revised the format to resemble the Loan Estimate and the Closing Disclosure.  
  • Each URLA field also was designed to conform with the most recent MISMO data standard (v3.4), developed and maintained by the industry.    
  • As of September 20, 2016, the GSEs have released a revised print-version of the URLA. A dynamic version that requires borrowers to complete only the sections relevant to their individual circumstances, and a Spanish language version of the form, are anticipated.
  • The new forms are closely aligned, but not perfectly aligned with HMDA data collection requirements. Of the 47 HMDA data elements:
    • 19 are a one-to-one match with the form;
    • 9 can be calculated or derived from URLA data (some examples include borrower age, total income, debt-to-income ratio, loan-to-value ratio);
    • 9 are known or calculated by lenders (application date, purpose, channel, AUS, credit score, total loan costs, lender credits, origination charges, rate spread);
    • 7 are not applicable to URLA (action taken and date, loan purchaser, commercial and reverse mortgages, home equity line of credit); and
    • 3 are not supported by URLA (manufactured home details, legal entity identifier).
  • The CFPB granted safe harbor status to the form for purposes of collecting the GMI data.
  • Lenders will be allowed to start collecting the new GMI data as of January 1, 2017, though they are not required to do so until January 1, 2018.

Impact:

  • This new form brings new implementation challenges.
  • Lenders will need to prioritize key components of implementation, including:
    • Aligning and integrating systems;
    • Updating policies and procedures;
    • Training key staff, especially consumer-facing and underwriting staff;
    • Coordinating URLA data with HMDA data; and
    • Understanding investor expectations.

 MBA's Position / Next Steps:

  • The GSEs have not yet announced a mandatory effective date for converting to the new form; MBA will continue to work with members to identify issues and concerns specific to the form as they arise.
  • MBA will also continue to provide ongoing education to members about the form and HMDA implementation as January 1, 2018, approaches.   

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