For people who are not fluent in English, the mortgage application and mortgage servicing processes have been plagued by misunderstanding and in some cases by intentional fraud.
As part of the campaign to prevent these problems, housing and civil rights advocates scored a major victory as the Federal Housing Finance Administration (FHFA) has decided to include language preference on the redesigned Uniform Residential Loan Application (URLA). Lenders cannot communicate with customers in the appropriate language unless they know what that preferred language is. By capturing the information in the mortgage application, lenders will know in the beginning what the customer’s language preference is.
The redesigned URLA will start being used in July, 2019 and will be mandatory for all loans being sold to Fannie Mae and Freddie Mac in January, 2020. (In practice, this will mean that the redesigned URLA will be used almost universally by that time.)
The language preference question will be included on the first page of the URLA in the “personal information” section. The question will be accompanied by disclaimers, including one saying that the loan transaction is likely to be conducted in English.
This is a huge win for the large number of advocates who fought for this against significant industry opposition. NHRC worked closely with a broad coalition of advocates including Americans for Financial Reform, UnidosUS, National CAPACD, National Low-Income Housing Coalition, and National Consumer Law Center to push FHFA to take this important step towards ensuring full and fair access to the mortgage origination and servicing processes. It was a three year long effort that at times seemed unlikely to succeed. Congratulations to all those who worked to win this victory!