Design, Update, Mandate, Delay: What Is Going on with the Redesigned URLA?
In 2016, the GSEs Fannie Mae and Freddie Mac unveiled a redesigned version of the uniform residential loan application, marking the first changes to the form in nearly 20 years.
The update was intended to modernize the form with a new layout designed to support the efficient and accurate collection of information and data and to help the industry identify ways to better support mortgage borrowers during origination and servicing, particularly non-English speaking consumers.
This meant creating a new, cleaner look and feel for the form that closely mirrored the loan estimate and closing disclosures, removing outdated fields not necessary for qualification, and adding new fields to reflect changes to policy and underwriting guidelines.
Then, after a minor update in December of 2017, the GSEs issued their URLA mandate, specifying that the industry could begin using the new form during an optional use period beginning July 1, 2019, and that use would then be required starting on February 1, 2020.
After the multi-year process, the industry would have time to adapt to the new requirements, make any changes in their data collection processes, and move on to a better, more efficient future.
Unfortunately, as is the case with most policy or regulatory updates, more changes were lobbied for and in August, at the behest of the Federal Housing Finance Agency, the GSEs announced that they would be delaying the mandate indefinitely to make more edits to the URLA design and assess the impact of those changes before issuing new guidance.
What a whirlwind.
The most recent version of the redesigned URLA was released in October and has integrated the directives from the FHFA.
And while there has been congressional pushback in regards to the edits requested by the FHFA, all other indications, such as the release of updated AUS specifications by the GSEs earlier this month, point to a process that is still moving forward, albeit slowly.
Industry technology providers such as Floify and Ellie Mae are still preparing and developing resources that will allow lenders and loan originators to migrate to the new form as smoothly as possible when the time comes and not miss a beat in their normal workflow.
The GSEs have stated that they expect to announce the updated implementation and required use timeline by the end of the year, with markers such as the previously mentioned AUS specs indicating that this prediction appears to be on schedule.