It has been almost four years since Fannie Mae and Freddie mac announced that 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 forced to use the new uniform residential loan application.
Fannie and Freddie announced last week that they were delaying mandatory use of the new URLA until March 1, 2021, due to the impact of the coronavirus on mortgage activity.
Prior to this change, using the new URLA was supposed to be mandatory on November 1, 2020, but this is no longer the case.
This is not the first time that 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 the mandatory use of the redesigned URLA to the leadership of the Federal Housing Finance Agency.
The decision to delay the use of the URLA came following a directive from the FHFA, which ordered GSEs to remove the language preference question and housing advice information from the URLA form put in place. to date, which is the standardized form used by borrowers to apply for a mortgage.
This decision was welcomed by the mortgage industry, namely the Mortgage Bankers Association, who argued that the issue of language preference may cause more problems than it solves.
The GSEs then rolled out the new mortgage application form without the language preference question and housing advice information sections, but the implementation date was postponed to November 1, 2020 to allow for industry to have time to prepare.
But now, as the industry focuses on managing the impact of the coronavirus, GSEs are once again delaying the URL.
Under the new implementation schedule, after a test 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 still have not been processed by March 1, the GSEs will allow these to process them, provided the lender notifies them. 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 URL timeline, click here.