October 2016 - Changing of the Guard

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 43 of 67

42 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ORIGINATION THE LATEST GSEs' Revised Loan App Form Set for 2018 Launch For the first time in two decades, the GSEs are updating their Uniform Residential Loan Application, and they are doing so with clarity and simplicity in mind. F reddie Mac and Fannie Mae in August an- nounced a redesigned standard application that borrowers will use when they apply for a single-family mortgage, the first redesign of its Uniform Residential Loan Application (URLA) in more than 20 years. Beginning in 2018, applicants and lenders will submit the revised URLA for single-family loans submitted to Freddie Mac and Fannie Mae, as well as mortgages federally insured by the Federal Housing Administration, the Veterans Administration, or the U.S. Department of Agriculture's Rural Housing Service. "The redesigned URLA allows much greater flexibility than in the past by acknowledging that not all loan applications are the same," said Samuel Oliver, VP of Single Family Business Transformation Management at Freddie Mac. "It does a great job of capturing new data that aligns with the needs of Freddie Mac, Fannie Mae, and other agencies, eliminating irrelevant underwriting data fields and displaying information in an easier-to-read format." This redesign will feature more simplified terminology and an eas - ier-to-follow layout for borrowers, plus currently absent data fields such as mobile phone number, email address, and military service. Other new features will include clearer instructions designed to help borrowers complete the applica - tion with less help from the lender and revised government monitor- ing information that incorporates revised Home Mortgage Disclosure Act demographic questions. A Spanish language version will also be available. According to FHFA Director Melvin Watt, the application must still undergo safe-harbor review by the Consumer Financial Protection Bureau, but FHFA believes the publication of the re - designed form now will "give the industry ample time to analyze and prepare for its use in 2018." "It also fulfills a scorecard item for Fannie Mae and Freddie Mac, and FHFA will continue to work with the two enterprises and other stakeholders as this project moves forward," Watt said. Andrew Bon Salle, EVP of Single-Family Business at Fannie Mae, said, "The redesigned URLA is the result of extensive collabora - tion with industry stakeholders." The GSEs collaborated with lenders, technology solution providers, mortgage insurers, trade associations, housing advocates, borrower groups, and other gov - ernment agencies and for the first time conducted extensive con- sumer and lender usability testing across the United States to gather their feedback on the URLA designs, Freddie Mac reported. Cordray to Senators: CFPB Does Tailor Regulations Responding to a letter from nearly three-quarters of U.S. senators, asking that community lenders and credit unions be exempt from complete CFPB oversight, Cordray says they already are. C onsumer Financial Pro- tection Bureau (CFPB) Director Richard Cor- dray has responded via letter to a bipartisan group of nearly three-quarters of the U.S. Senate, which in July petitioned him to exempt community lenders and credit unions from complete CFPB oversight. The senators' letter, headed by Sen. Joe Donnelly (D-Indiana) and Sen. Ben Sasse (R-Nebraska) and signed by 68 other senators, asked Cordray to consider the impact of the CFPB's rulemaking on smaller financial institutions and consum - ers. Credit unions have long sought relief from the CFPB's regulations, which the credit unions maintain are aimed at "bad actors" that caused the financial crisis. Critics of the Dodd-Frank Act, out of which the CFPB was created, have long maintained that its "one size fits all" approach to regulation that was intended for Wall Street has had an adverse effect on Main Street. Noting the health of consumer financial markets and the strength exhibited by community banks and credit unions, Cordray told the senators in his letter that the CFPB already does tailor its regulations for different models and classes of institutions, such as providing an expanded "safe harbor" for small creditors for their Qualified Mortgage (QM) loans, exempt - ing small creditors in rural and underserved areas, implementing a two-year pause for small creditors allowing them to make balloon payment QMs, allowing relaxed rules regarding conflict of interest in ordering appraisals and other valuations, exempting smaller ser - vicers from the TILA requirement to provide periodic statements, exempting smaller servicers from RESPA's loss mitigation require - ments, and exempting lower-vol- ume depository institutions from Home Mortgage Disclosure Act (HMDA) reporting. "As I have expressed in the past, the Bureau recognizes that com - munity banks and credit unions did not cause the financial crisis," Cordray wrote. "For that reason, the Bureau is committed to ensur - ing that the regulations we promul- gate are well-tailored and effective." The senators' letter was not the only time this year that congress has asked Cordray to lighten the regulatory burden for small lend - ers and credit unions. In March, three-quarters of the U.S. House of Representatives signed a letter to Cordray asking him to exercise authority granted him by Dodd- Frank to exempt credit unions from certain CFPB rules.

Articles in this issue

Archives of this issue

view archives of TheMReport - October 2016 - Changing of the Guard