Federal Housing Finance Agency (FHFA) officials said the agency is making an effort to bolster mortgage access for limited English proficiency (LEP) borrowers.
The FHFA, with Fannie Mae and Freddie Mac, recently launched a multi-year plan targeting improved access to mortgage credit for LEP borrowers.
The effort involves adding a preferred language question to the redesigned Uniform Residential Loan Application (URLA) that will be mandatory for government-sponsored enterprise (GSE) loans beginning in February 2020.
National Association of Federal Credit Union (NAFCU) officials said while the organization supports better access to mortgage credit for creditworthy borrowers, it was concerned about potential costs and legal issues that could arise from such a question.
Other prime components of the plan, officials said, include Phase 1 will be implemented in late 2018 to enable lenders, services, and housing counselors to access existing GSE materials and those from other government agencies; the Spanish translation of the glossary will be completed this year; and translation into the other languages will be completed over the next two years.
After the NAFCU’s comments, officials said disclosure language was attached to the preferred language question to mitigate legal concerns raised by lenders. They did acknowledge, however, that there are still concerns about the burden the enactment of the plan could have on credit unions.