by C/A Staff
Can you believe it’s been three years since Fannie Mae and Freddie Mac (the GSEs) made the announcement that they were going to revise the Uniform Residential Loan Application (URLA) for the first time in 20 years?
Granted, change is needed and the new ‘dynamic’ form should be a much-improved version over the current URLA, but due to several delays in the effective and mandatory use dates for the URLA, we’re still using the outdated form. There was an original effective date of January 1, 2018, which was later moved to February 1, 2020 with optional use allowed beginning on July 1, 2019. Then, last June, the GSEs postponed the July 1 date, leaving the door open until their announcement was made on December 29, which gave us a new effective date of September 1, 2020, and mandated use date of November 1, 2020. So why all the delays? The first reason: changes, changes, changes! It appears the powers that be just can’t make up their mind about what they want to include on the form.
One of the first revisions to the URLA was the addition of the Language Preference Question. The last round of changes, coming at the direction of the Federal Housing Finance Agency, involved removing this question after concerns were raised involving customer relations issues if lenders could not actually serve borrowers in their preferred language. There were also operational and legal questions raised by the language preference information. Without answers to how these issues and questions could be resolved, it was decided to remove the Language Preference question, along with the Homeownership Education and Housing Counseling question, and include them on a separate, voluntary form.
Another reason for the delays is the consideration of how long it will take to implement the changes. It’s important to remember the GSEs aren’t the only ones involved in the process; aggregators and software providers will need time to revise and test their systems for readiness. There will also need to be a testing period for lenders to submit applications.
So, when exactly are we supposed to start using the new URLA?
- The GSEs “Implementation Timeline” currently projects a functionality integration test period from March 1 through September 1.
- March 1 through June 1 is a period in which directly integrated software providers and lenders will be able to test the loan application submission process.
- Also during this time period, loan officers and their teams will be able to undergo training on the redesigned URLA and accompanying supporting processes and procedures.
- There is additional production testing from June 1 through August 31 for certain directly integrated customers to identify and/or address any unexpected issues prior to the open production period.
- Finally, beginning September 1, all lenders may optionally choose to begin using the newly designed URLA form and may do so at any time from September 1 through October 31, 2020.
- Mandatory usage of the form begins November 1, 2020.
Stay tuned, we here at C/A will keep you informed as this process progresses.