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FHFA: Preferred Language Question In Interest of Mortgage Market

shutterstock_268901966According to a recent notice posted by the Federal Housing Finance Agency (FHFA), a preferred language question is set to be included in the Uniform Residential Loan Application (URLA) to enable borrowers who prefer to communicate in a language other than English. The addition is part of a multiyear effort to improve language access for limited English proficient (LEP) borrowers in the U.S.

Fannie Mae and Freddie Mac will publish the redesigned URLA later this year, which also includes updates that were announced in August 2016. Lenders can use the new URLA as early as July 2019, but using the new URLA for Enterprise loans will become mandatory starting in February 2020.

“In carrying out FHFA’s statutory responsibility to support access to credit, FHFA has committed to improving the ability of all mortgage-ready borrowers to understand and participate fully in the mortgage process,” said FHFA Director Melvin L. Watt. “Adding a preferred language questions to the URLA will enable mortgage industry participants to connect LEP borrowers to available language access resources. This will support access to credit for a growing segment of the nation’s housing finance market.”

According to the FHFA, this is the first significant revision in over 20 years; it also creates an opportunity to capture preferred language information. Thanks to the stakeholder outreach and public feedback on the FHFA’s broader language access “Request for Input”, the agency was able to collect concerns related to including a language preference question. Adding disclosure language helps mitigate legal concerns raised by lenders, as well as set appropriate borrower expectations about language servicers, according to the FHFA, and improving language access for LEP borrowers is in the interest of all segments of the mortgage market.

The full release from the FHFA can be found here.

About Author: Dean Terrell

After earning his B.A. in Writing Arts at Rowan University located in South Jersey, Terrell moved to Texas to pursue a career in publishing and editorials.

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