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TH E M R EP O RT | 53 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT FHFA Expands Language Options A recently added preferred language question aims to enhance borrower accessibility. A ccording to a recent notice posted by the Federal Hous- ing Finance Agency (FHFA), a preferred language question is set to be included in the Uniform Residential Loan Application (URLA) to enable borrowers who prefer to communicate in a language other than English. The addi - tion is part of a multiyear effort to improve language access for limited English proficient (LEP) borrowers in the U.S. Fannie Mae and Freddie Mac will publish the redesigned URLA later this year, which also includes updates that were an - nounced in August 2016. Lenders can use the new URLA as early as July 2019, but using the new URLA for Enterprise loans will become mandatory starting in February 2020. "In carrying out FHFA's statutory responsibility to support access to credit, FHFA has com - mitted to improving the ability of all mortgage-ready borrowers to understand and participate fully in the mortgage process," said FHFA Director Melvin L. Watt. "Adding a preferred language question to the URLA will enable mortgage industry participants to con - nect LEP borrowers to available language access resources. This will support access to credit for a growing segment of the nation's housing finance market." According to the FHFA, this is the first significant revision in over 20 years; it also creates an opportu - nity to capture preferred language information. Thanks to the stake- holder outreach and public feedback on the FHFA's broader language ac- cess "Request for Input," the agency was able to collect concerns related to including a language preference question. Adding disclosure lan - guage helps mitigate legal concerns raised by lenders, as well as sets appropriate borrower expectations about language servicers, accord - ing to the FHFA, and improving language access for LEP borrowers is in the interest of all segments of the mortgage market. Mortgage Data Security: Opportunities for Improvement The NAFCU addresses vulnerabilities in protecting consumer information. L ast month, National Association of Federally- Insured Credit Unions (NAFCU) Board Trea - surer and President and CEO of Mission Federal Credit Union, Debra Schwartz testified during a hearing titled "Data Security: Vulnerabilities and Opportunities for Improvement," held by the Subcommittee on Financial Insti- tutions and Consumer Credit. As data security standards remain a subject of considerable debate in the financial services sector, Schwartz detailed the impact of the recent data breaches on credit unions and outlined key data security principles Congress can take to hold other entities to similar standards as financial institutions. "Credit unions suffer steep losses in re-establishing member safety after a data breach occurs," said Schwartz. "They are often forced to charge off fraud-related losses, many of which stem from a negligent entity's failure to protect sensitive financial and personal information or the illegal maintenance of such information in their systems." Schwartz continued to explain, "Moreover, as many cases of identity theft have been attributed to data breaches, and as identity theft continues to rise, any entity that stores financial or personally identifiable information should be held to minimum federal stan- dards for protecting such data." According to the subcom- mittee's memorandum, as the public is still recovering from the aftermath of Equifax's breach, "Congress must thoroughly ex- amine data security vulnerabilities and the shortcomings of the exist- ing federal and state regulatory re- gimes to identify any gaps in data security regulation and highlight opportunities for reform." In the November 2017 edition of MReport magazine, the cover story "Threat Assessment" explored the top five ways companies are vulner - able to having their data hacked— brute force access, malware attack, phishing, privilege misuse, and physical theft—in addition to report- ing industry experts' insights. "When it comes to data breaches such as Equifax, the threat doesn't go away with time," said Dan Jones, VP of Technology & Sales Support at Churchill Mortgage. "Literally in 10 years, someone could buy that list again and try to take out a mortgage or even attempt a HELOC in some - one else's name." According to Todd Hougaard, a Software Product Manager at Mortgage Cadence, an Accenture Company, the mortgage industry must be wary of future fraudulent activities. "It's quite possible that we are entering a new period of criminal fraud activity in this industry," said Hougaard. "If we are forced to as - sume that bad actors now have sen- sitive financial information for most consumers and that these criminals are experts at manufacturing fake online identities based on this new information, what additional protec- tions are going to be required?" "As many cases of identity theft have been attributed to data breaches . . . any entity that stores financial or personally identifiable information should be held to minimum federal standards for protecting such data." —Debra Schwartz, Board Treasurer and President and CEO, Mission Federal Credit Union