Fannie, Freddie Update Standard Mortgage Application Form

Posted by Patrick Barnard on August 24, 2016 No Comments

Fannie Mae and Freddie Mac have updated the Uniform Residential Loan Application (URLA), the standard form used by borrowers to apply for a mortgage.

It is the first update for the form – also known as Fannie Mae form 1003 and Freddie Mac form 67 – in more than 20 years.

The redesigned form is better organized, which improves navigation for users, the government-sponsored enterprises (GSEs) claim. This improved organization will “support accurate data collection and better efficiency for a more consumer-friendly experience,” the companies say in a joint release.

Some new fields have been added to the form, and others have been updated to “capture loan application details that reflect today’s mortgage lending business” and that support both GSE and government requirements.

The new form also sports “clearer instructions.”

“Simplified terminology enables borrowers to complete the loan application with less help from the lender,” the GSEs claim.

Importantly, the new form includes new fields to support increased reporting requirements under the revised Home Mortgage Disclosure Act (HMDA).

In addition, the GSEs worked together to create a common corresponding data set, called the Uniform Loan Application Dataset (ULAD), to ensure consistency of data delivery.

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

The documents are available now so that lenders can get familiar with them.

Lenders may begin using the redesigned URLA on Jan. 1, 2018. A timeline for required use of the redesigned URLA and ULAD will be established at a later date.

The updating of the form is part of the GSEs’ Uniform Mortgage Data Program, a larger joint initiative, under the direction of the Federal Housing Finance Agency, to standardize single-family mortgage data in the U.S.

In a statement, Mel Watt, director of the FHFA, says the updating of the form “represents a significant step in a multiyear effort to update, standardize and enhance the quality of loan information for underwriting single-family mortgages.”

“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 says. “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.

“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 adds. “It also fulfills a scorecard item for Fannie Mae and Freddie Mac, and FHFA will continue to work with the two enterprises and other stakeholders as this project moves forward.”

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