It’s been almost four years since Fannie Mae and Freddie Mac announced they are changing the standard mortgage application form for the first time in 20 years, but it will be another 11 months before the mortgage industry is required to use the new uniform residential loan application.
Fannie and Freddie announced last week that they are delaying the mandatory use of the new URLA until March 1, 2021, due to the impact of the coronavirus on the mortgage industry.
Prior to this change, use of the new URLA was supposed to be mandatory on November 1, 2020, but this is no longer the case.
This isn’t the first time the new URLA has been delayed.
Originally, government-sponsored companies dictated that lenders would be required to start using the new loan application by February 1, 2020.
But last year, the GSEs delayed mandatory use of the redesigned URLA at the direction of the Federal Housing Finance Agency.
The decision to delay the use of the URLA came on the directive from the FHFA, which ordered GSEs to remove the language preference question and housing advice information from the updated URLA form, which is the standard form used by borrowers to apply for a mortgage.
This decision was welcomed by the mortgage industry, namely the Mortgage Bankers Associationwho asserted that the issue of language preference could cause more problems than it solved.
GSE then rolled out the new mortgage application form without the sections on language preference questions and housing advice, but the implementation date was delayed to November 1, 2020 to allow industry to have time to prepare.
But now, as the industry focuses on managing the impact of the coronavirus, the GSEs are delaying the URLA again.
Under the new implementation schedule, after a testing period, lenders can start using the new URLA form on January 1, 2021. From that date until March 1, 2021, use of the new URLA form is optional.
But after March 1, the use of the new URLA form is mandatory.
If there are loan applications that were started on the old form but have still not been processed by March 1, GSEs will allow these to be processed, provided the lender notifies the agencies. “as soon as possible”.
And as of March 1, 2022, the current URLA form will no longer be accepted by GSEs.
For more information on the new URLA calendar, click here.
