Data Facts Lending Solutions Blog

Mortgage Industry Professionals...Get Ready for URLA

by Susan McCullah

May 31, 2019 3:16:06 PM

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URLA graphicWhen you're a mortgage pro you rarely get to sit back and relax for long. There's always a change coming your way to handle. The upcoming revision of the Uniform Residential Loan Application (URLA) is one of them. 

Now the GSEs Fannie and Freddie didn't decide to change the format of URLA just to make your life difficult. They have good reasons for the major revisions coming soon to a mortgage loan near you. 
  • Greater efficiency. To make the form more user-friendly, the GSEs ran it through tests with a variety of mortgage participants, including brokers, loan officers, borrowers, and underwriters. No more filling out irrelevant fields.
  • Better transparency. Fannie, Freddie, and some federal regulators created a new data set that improves the consistency in and the quality of data that's collected during the process. 
  • Stronger certainty. The updated URLA creates an industry-wide standard that supports the lending processes that are currently trending.

This is the first change to the form in almost 20 years. Beginning February 1, 2020, mortgage lenders will be required to use the updated URLA for all loans eligible for re-sale on the secondary market. The form is approved by the Consumer Financial Protection Bureau (CFPB) and satisfies the safe harbor requirements for the Equal Credit Opportunity Act (ECOA). Lenders have the option of changing over to the new form on July 1, 2019, but it isn't required until February. 

Lead Gen Infographic

A significant revision is that much of the form's language has been changed to increase its clarity, simplicity, and brevity. The instructions were completely rewritten and contain less complex industry jargon that borrowers typically found confusing. 

As a nod to the ever-increasing impact digital has over the mortgage industry, the web version of the URLA is dynamic, meaning that sections appear and disappear based on the applicant's answers. If a section doesn't apply to that particular applicant, they don't see it. 

While yes, it is a change you need to plan for and get comfortable with, you have plenty of time to learn about the URLA. Adopting it well before the required date is the best, least stressful way to deal with the change.

Topics: mortgage process, Lending compliance, mortgage education, digital mortgage, URLA

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