At a Glance
Uniform Residential Loan
As mortgage lending becomes more digi- tal in every step of the process, lenders, investors and regulators are taking a long hard look at the data underlying every
loan. For all of the parties to communicate effectively,
loan data needs to flow seamlessly from application to
underwriting to closing to investors.
In response to the need for an overhaul of the existing
mortgage-application process and information collected from borrowers, government-sponsored enterprises
(GSEs) Fannie Mae and Freddie Mac are implementing
the first major overhaul of the Uniform Residential Loan
Application (URLA) in more than 20 years.
This redesign provides both lenders and borrowers with a more consumer-friendly, streamlined loan
application. With input provided from several federal
agencies, the new URLA will help prevent information
gaps in the initial application.
Also, the GSEs, under the direction of their federal
regulator, jointly created a data set that’s a component
of the Uniform Mortgage Data Program. It is part of
an effort to enhance data quality and standardization
that meshes with their underwriting programs.
While required use of the new URLA and the data
set is still more than a year away, optional use begins in
July of 2019. Mortgage originators and lenders need to
understand what is changing and how they can work
with their technology partners to ensure a smooth
In deciding how the application would look and
determining which data fields needed to be changed
or updated, the GSEs worked with lenders, technology
solution providers, Ginnie Mae, mortgage insurance
companies and several federal agencies, and more, to
ensure that these changes would benefit all parties.
These adjustments were then put through eight
vigorous usability tests from borrowers, underwriters and all other parties who are imperative in this
process. The resulting loan application provides more
clarity for borrowers and a data standard that supports
the evolution of digital lending.
At the conclusion of this process, the Consumer
Financial Protection Bureau reviewed the document
and gave it an official approval. The approval
establishes a safe harbor for use under the Equal Credit
Opportunity Act, which makes it unlawful for creditors
to discriminate against applicants.
The URLA document supports changes in mortgage
industry credit, underwriting, eligibility policies and
regulatory requirements. The redesigned URLA was
updated to more easily and accurately capture all of
the loan-application information that is relevant and
useful to the industry throughout the loan-origination
process and in making an underwriting decision. The
new layout provides flexibility and supports current and
evolving practices for the collection of loan information.
The URLA document was designed to improve the
mortgage-application process for both lenders and borrowers. The new application promotes greater efficiency, transparency and certainty. The loan-application process doesn’t change for the lender or borrower.
New and updated fields reflect changes in policy and
underwriting standards, helping lenders better comply
with new regulations. New borrower-demographic
information, for example, will be solicited to comply
with updates to the Home Mortgage Disclosure Act.
Outdated fields not relevant to the qualification
process (for example, automobile make and model)
have been removed from the application.
The effort aims to provide an easier, more consumer-friendly loan-application experience. Less jargon,
more plain language and clearer instructions increase
clarity and understanding.
The interactive version of the redesigned URLA won
a 2017 ClearMark Award of Distinction from the Center
for Plain Language. The ClearMark award recognizes
the best plain-language communication written for
A Spanish version of the printed URLA also was created to help people understand and complete the application. The Spanish version is a non-executable form,
however, so applicants must still sign the English URLA.
The URLA document has a cleaner look and feel, with
more white space and easier navigation. It has the same
look and feel as the Loan Estimate and Closing Disclosure forms and also is dynamic in nature regarding addition and deletion of sections based on loan scenarios.
Susan Graham is president and chief operating officer of
Financial Industry Computer Systems Inc. (FICS), a mortgage software company specializing in cost-effective,
mortgage-origination, residential mortgage-servicing and
commercial mortgage-servicing software for mortgage
lenders, banks and credit unions. FICS’ software solutions
use Microsoft .NET Framework, providing customers the
flexibility to choose an in-house or cloud-hosting solution.
FICS also provides document-management and web-based
capabilities on its full suite of products. Reach Graham at
New Mortgage Application
Puts Everyone on the Same Page
Originators, lenders and technology partners should understand the changes
By Susan Graham
Government-sponsored enterprises (GSEs) Fannie Mae
and Freddie Mac have revised the Uniform Residential
Loan Application for the first time in 20 years. The GSEs
added and removed fields and simplified the language
to establish a standard across the mortgage industry.
Source: Mortgage Bankers Association
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