For more than three years, Fannie Mae and Freddie Mac have said that a complete redesign of the Uniform Residential Loan Application was underway. And more than once, the mandatory use of the new URLA was delayed due to GSEs demanding additional updates and clarification.
However, it seems that Fannie Mae, Freddie Mac, and the GSEs are finally ready to move forward and have set a new date for the mandatory use of the updated URLA.
Lenders will be required to begin using the new loan application by November 1, 2020.
The redesigned URLA is meant to be more consumer-friendly, streamlined with current technology, and be compliant with new regulations. To accomplish this, the primary version of the 1003 form will now be digital.
While the industry sees this as a significant advancement, the Mortgage Bankers Association was concerned with certain aspects of the redesigned digital 1003, specifically the Language Preference Homeownership Education and Housing Counseling questions.
Both of these questions were removed from the mandatory URLA form. However, they are included in a separate voluntary form.
Other changes to the redesigned URLA include:
- Revised “Use and Sharing of Information” in Section 6.
- Transitioning the Military Service question from the “Borrower Information, Section 1a” to the “Demographic Information in Section 7”
- Several edits for consistency and usability
Timeline to Deadline for the Mortgage Industry
There will be a period of testing beginning in this new year, and lenders may begin using the new URLA form as soon as September 1, 2020. Use of the new URLA will be considered optional from September 1 through October 31, 2020.
However, beginning November 1, the use of the new URLA form will be mandatory.
Impeding Transition to Digital Mortgage
We’ve been talking about the digital mortgage revolution for years, and the mandatory use of a digital 1003 is just one of the changes we were ready for. Our SmartApp 1003 is customizable, secure, compliant with current regulations including the new Preferred Language option –all standard features well before it was mandated.
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