The Federal Housing Finance Agency will add a preferred language question to the redesigned Uniform Residential Loan Application (URLA) to assist non-English speakers.
Borrowers who prefer to communicate in a language other than English will be able to identify that language on the form. It also provides clear disclosures that the mortgage transaction is likely to be conducted in English and that language resources may not be available.
The addition of this question is part of a broader, multiyear effort that FHFA is undertaking with Fannie Mae and Freddie Mac to improve language access for limited English proficient (LEP) borrowers. Lenders may begin using the redesigned URLA in July 2019, but the use of the redesigned form will not be mandatory for Enterprise loans until 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,” FHFA Director Melvin Watt said. “Adding a preferred language question 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.”
FHFA believes improving language access for LEP borrowers is in the interest of all segments of the mortgage market.
FHFA has taken steps to address concerns raised about the inclusion of a language preference question. These steps include adding disclosure language to the question to mitigate legal concerns raised by lenders, set appropriate borrower expectations about available language services, and inform borrowers about other language access resources. Fannie and Freddie will also publish a separate disclosure translated into several languages that further informs borrowers about the nature of available language resources. Use of this disclosure will be optional for lenders.