Posts tagged ‘URLA’

Do You Know What URLA Stands For?

Good morning, folks. With the holiday season officially upon us, I figure I have about a week and a half more of your attention before you go on a mental holiday from work through January 3rd. So, in the next few days, I just want to highlight a couple of important deadlines which are quietly creeping up on the banking world. 

Which brings us to today’s headline. URLA stands for the Uniform Residential Loan Application. It is the form used and required by both Fannie and Freddie, on which mortgage loan applications are processed. Given the ubiquity of the GSEs, this means that if your credit union offers mortgage loans, your credit union or vendor uses this form. Just how important is the information on this form? Well, it’s the first step of complying with virtually all mortgage lending regulations ranging from TRID to HMDA. It is also the form Fannie and Freddie use to make underwriting determinations. The bottom line is that it’s a crucial document which is undergoing major changes for the first time in 20 years. 

Many of the changes are long overdue. For example, interactive drop-down boxes make it easier to write down all the necessary information without having to type it out. A lot of these changes are common sensical as we move towards paperless mortgage transactions. 

Now for the bad news. While many of these changes make sense, it means that your mortgage staff, which is responsible for accurately filling out these forms, must be trained and knowledgeable about the new updates. Furthermore, you have to make sure that your systems have integrated the new forms and that all systems are ready to go no later than March 1st. That is the date on which Fannie and Freddie will stop accepting the old forms. 

My hope is that for many of you, this is old news, and I am simply restating the obvious. For those of you for whom work needs to be done, the time is now to make sure your systems are ready to go before you settle your brains for a long winter’s nap. 

November 30, 2020 at 9:22 am 2 comments

Three Things You Should Know Before You Celebrate The Fourth

Welcome to the second half of the year. Here are some things I wanted you to know as you begin your holiday – shortened week.

Optional URLA Postponed

The Uniform Residential Loan Application (URLA) is one of the most important documents in mortgage lending. It’s the standard loan application document mandated for use by Fannie – Form 1003 and Freddie – Form 65 for the last twenty years to collect information for mortgage applicants. Equally important, the form is used to create the Uniform Loan Application data set which is also administered jointly by the GSE’s. so it was big news when the FHFA announced that it would be updating form 1003 to make it easier to use for both lenders and borrowers. However this is a reminder that the FHFA has announced that July 1st will not be the first day that lenders have the option of using the new form. A new date has yet to be announced.

Can You Comply With CECL Using an Excel Spreadsheet?

Speaking of compliance dates, even though the day for credit union and compliance is still years away, now is the time to start preparing for this new accounting standard. In that vein, and because I’m such a helpful guy, I wanted to give you a head’s up about these proposed amendments to these CECL standards. I won’t even pretend to know how important these changes are other than to tell you that they don’t change the fact that your credit union is still going to be subject to CECL. I also wanted to pass along this quote from the Chairman of the FSAB in an interview with the American Banker, “The questions that the board has received from various sizes of financial institutions has really been about making sure that they understand what the board intended. What we have found throughout the process is, we believe — and we’ve said this in the document, banking regulators have said it publicly — that this standard is scalable and can be applied by large financial fusions as well smaller financial solutions. We believe smaller financial institutions can apply and do this on an Excel spreadsheet. And banking regulators have agreed with that.”

HMDA Comment Period Extended

If you, like your faithful blogger, were wondering how you were going to do a good job on the CFPB’s Advanced Notice of Proposed Rulemaking seeking feedback on whether or not it should scale back the amount of data which the CFPB now requires HMDA institutions to collect you can breathe a sigh of relief and go on our July 4th holiday without feeling guilty about the comment letter. At the request of trade associations – good work fellas – the CFPB has extended the comment period until October 15th.

On that note, enjoy your day. I’m going to spend my lunch hour buying a New Jersey Nets jersey so I’m ready to jump on that bandwagon now that they made so many free agent pickups. Let’s face it, would you rather spend money going to Manhattan to watch the Knicks lose or taking the train to Brooklyn and watching entertaining basketball?

July 1, 2019 at 9:26 am Leave a comment

Are You Prepared To Lend In A Multi-Lingual World?

I’ve been away in beautiful Syracuse, New York for the last couple of days, attending the Association’s annual Small Credit Union Roundtable and there was one bit of news that I overlooked that is worth passing on. On Friday, the Federal Housing Finance Agency, which oversees the ostensibly bankrupt Fannie Mae and Freddy Mac, announced that it is amending the Uniform Residential Loan Application (URLA) used by the GSE’s to include a “preferred language question.”

If all goes according to plan, you will see forms with the new question by the end of 2017. Lenders will have the option of using the redesigned URLA by 2019 with use mandatory by 2020. I’ve been somewhat remiss in not talking about these changes sooner. The preferred language question is one of a series of changes that the GSE’s have been planning on implementing since August of last year.

Does this mean that your credit union will have to find interpreters for non-English speakers applying for a mortgage loan? No. The new question includes a disclaimer that “your answer does not mean the Lender or Other Loan Participants agree to communicate or provide documents in your preferred language. However, it may let them assist you or direct you to persons who can assist you.”

That being said, with the explosion of apps such as Google Translate, it is getting cost-effective to translate documents. One of the reasons why I’m highlighting this announcement is because I do expect legal and compliance demands for consumer disclosures to be provided in multiple languages to increase, particularly in states such as New York which have such diverse ethnic communities.

Senate Votes To Kill Arbitration Rule

Senate Republicans stopped their circular fire squad last evening long enough to pass a bill blocking the CFPB’s regulation banning arbitration clauses that include prohibitions against consumers joining class action lawsuits. The Senate broke 50/50 with Vice President Mike Pence casting the tie-breaking vote. The vote comes on the heels of the Treasury report harshly criticizing the CFPB’s research methodology, which I talked about in yesterday’s blog.

October 25, 2017 at 9:14 am Leave a comment

New GSE Application Can Help With HMDA Compliance

I had a great time the other night hanging out with the Association’s Young Professionals Commission.  I even got to celebrate the birthday of one of their newest members.  Regardless of age, one of the questions that always comes up at such gatherings is what issues are lurking out there to sneak up on the unsuspecting credit union.  The one I keep coming back to is HMDA and yesterday Fannie and Freddie took a huge step to help those of you who have to comply with this data reporting regulation be ready when the expanded mandate becomes effective in January of 2018.

The uniform residential loan application which you may know as either Form 1003 or Freddie Mac Form 65 is a standardized document that has been around for 20 years.  So many mortgages are connected in some way to Fannie and Freddie that the application is used by almost all lenders in the country.  Yesterday, the GSEs announced that they have created a new, redesigned URLA form.  Most importantly, for my purposes, the form includes the expanded data fields that impacted lenders will have to fill out to comply with the HMDA regulation.  In addition, if the GSEs are correct, the new form will be easy to integrate into your existing lending systems and better suited for an online application process.  For those of you dinosaurs who still rely on paper, the updated URLA will still be available in a hard copy.

Even though the form doesn’t become effective for over a year, you can use it as an easy way to cross reference the information you collect now against the information you will need to gather in the relatively near future.  Don’t underestimate just how much more information you will have to collect.  According to a summary provided by the CFPB, the new HMDA reporting requirements include data points for applicant or borrower age, credit score, automated underwriting system information, unique loan identifier, property value, application channel, points and fees, borrower-paid origination charges, discount points, lender credits, loan term, prepayment penalty, non-amortizing loan features, interest rate, and loan originator identifier as well as other data points. The HMDA Rule also modifies several existing data points.

The good news is that the CFPB narrows the scope of the institutions to which HMDA applies.  Starting in 2018, if your institution didn’t originate 25 covered mortgage loans in each of the preceding two years, or at least 100 open-end lines of credit in each of the preceding two calendar years, HMDA doesn’t apply to you regardless of your asset size.  Still, this is not the type of regulation you want to keep to the last second.  The CFPB and Congress want this additional information for a reason and I doubt regulators are going to have much patience for those of you who aren’t prepared for this mandate.  The new and approved application is a great way to get ready to comply.

August 24, 2016 at 8:23 am 1 comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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