For the first time in nearly 20 years, both Fannie Mae and Freddie Mac will be revising and redesigning their Uniform Residential Loan Application (URLA) forms – Fannie Mae Form 1003 and Freddie Mac Form 65. In addition, the Government Sponsored Enterprises (GSEs) will also be developing a corresponding standardized dataset known as the Uniform Loan Application Dataset (ULAD).
The URLA is jointly owned by both Fannie Mae and Freddie Mac, and their plan is to reorganize the layout of their URLA forms to make them more consumer-friendly. They will also be updating the terminology to make the forms easier for borrowers and industry stakeholders to understand, and are adding new data fields to support both their and the government’s requirements – including regulations published by the FHA, VA, USDA-RD, and the CFPB.
"Given the mortgage industry’s many changes over the years, along with the GSEs’ changes to underwriting policies and eligibility requirements, the time is right to redesign the form to better address industry needs,” said the GSEs via their joint press release.
Fannie and Freddie’s URLA redesigning effort is part of the Uniform Mortgage Data Program (UMDP), and aligns with the UMDP’s focus on enhancing data quality, consistency, and clarity to help strengthen the loan manufacturing process. The revised forms should provide both lenders and borrowers with greater clarity and an easier, more consumer-friendly loan application.
Within their release, the GSEs laid out the following 3 objectives for the project:
- Update the URLA to collect information that is relevant and useful to the industry, and provide lenders with the information needed to make an underwriting decision.
- Redesign the format and layout of the URLA to make it more consumer friendly, enhance collection, and improve usability.
- Define a Mismo compliant dataset that supports the URLA.
In addition, Fannie and Freddie also provided the following updates that will be made to the URLA and corresponding ULAD:
- Removing a number of fields, including (but not limited to) property legal description, automobile owned, year built, and net worth.
- Updating borrower contact information, such as cell phone number and email address.
- Adding a new military service section to assist veterans that are seeking or qualifying for VA loan opportunities.
- Making it easier to identify employer and self-employment information.
- Including fields to collect more detailed information about the property and loan purpose, including refinance types, energy improvements, and project types.
- Adding amortization types and loan features that will describe the mortgage and loan terms.
- Updating the acknowledgement, agreement, and authorization sections to benefit the consumers and industry participants that use the loan application.
- Revising government monitoring information (ethnicity and race) in accordance with the new Home Mortgage Disclosure Act (HMDA) requirements that were issued by the CFPB.
The GSEs are hoping to publish the final version of their redesigned URLA (and corresponding ULAD) by the summer of 2016, and are also hopeful to have their automated underwriting system specifications updates published by this time as well. The exact implementation timeline for the redesigned URLA is still in the planning phase, and more information will be provided as the year progresses.
It’s important to note that neither Fannie nor Freddie plan on collecting the redesigned URLA or ULAD in 2016.