the redesigned uniform residential loan...

The Redesigned Uniform Residential Loan Application Becky BrelandSenior Compliance Manager

CENTER OF REGULATORY INTELLIGENCE WEBINARS

January 12, 2017

Form 1003

The Standard Uniform Residential Loan Application

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The Federal Housing Finance Agency (FHFA) originally released the form in late August 2016, with instruction that it may be used by January 1, 2018.

“The redesigned format is more consumer friendly, it supports accurate data collection, and is more efficient.”

Fannie Mae

Important Dates

Importance of this Form

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• FHFA – To Be Determined by Agency*

• CFPB – January 1, 2017

“May Use” Dates by Agency

Our Recommendation – start using the Demographic Information Addendum in 2017 as this will prepare you for the new Home

Mortgage Disclosure Act data fields.

* If your institution begins using the Demographic Information Addendum in 2017, be sure to cross out Section X from the current version of the 1003.

Importance of the FormUse of the URLA ensures the form is compliant

with Regulation B

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For Multiple Borrowers

Change in Process

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0201Borrowers with Joint Financial InformationRequires the URLA and URLA Additional Borrower forms

Borrowers with Separate Financial InformationSeparate URLAs for each borrower

Joint assets, liabilities and real estate should be listed on only one application and not duplicated on more than one application.

Overview of the Form

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Similar format and layout to the Loan Estimate and Closing Disclosures

Shaded light-gray areas indicate fields that the lender is supposed to complete.

8 sections contain borrower information, 5 sections include lender loan information

SECTION 1Borrower Information

a) Personal informationb) Current employment/self-

employment and incomec) Additional employment (if

applicable)d) Previous employmente) Income from other sources

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Section 1a

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– Designation of individual credit

– Citizenship status: U.S. Citizen Permanent Resident

Alien Non-permanent

Resident Alien– Contact information:

Email Cell phone numbers

– Current address and living expenses:

No primary housing expenses

– Military service and status

Personal Information NEW!NEW!

Section 1b & 1c

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– Self-employment Ownership interest is less

than 25% Ownership interest is

more than 25%

– Gross monthly income Now includes a

designation of military entitlements

Dividends, interest and net rental income go into other income category

– Statement as to employment by a family member or party to the transaction

Current Employment/Self-Employment and Income & Additional Employment

NEW!NEW!

Section 1d

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Previous Employment

Selection for applicant as business owner or self-employed

Section only needs to be completed if the borrower’s current employment is less than 2 years

NEW!NEW!

Section 1e

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Income from Other Sources

Listing of various sources of income

NEW!NEW!

SECTION 2Financial Information –Assets and Liabilities

a) Assets – Bank accounts, retirement and other accounts you have

b) Other assets you havec) Liabilities – Credit cards,

other debts and leases that you owe

d) Other liabilities and expenses

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Section 2a & 2b

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Layout has changed and now includes a listing of types of accounts the applicant may own:– Bank accounts– Retirement accounts– Other asset type

accounts

Assets & Other Assets You Have NEW!NEW!

Section 2c & 2d

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Debt payoff: at or before closing

Liabilities & Other Liabilities and Expenses NEW!NEW!

SECTION 3Financial Information –Real Estate

a) Property you ownb) If applicable, complete

information for additional property

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Section 3

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Creditor name Account number Unpaid balance To be paid off at or

before closing Type of loan Credit limit (if

applicable)

Property You Own & Complete Information for Additional Property

NEW!NEW!

SECTION 4Loan and Property Information

a) Loan and property informationb) Other new mortgage loans on

the property you are buying or refinancing

c) Rental income on the property you want to purchase

d) Gifts or grants you have been given or will receive for this loan

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Section 4

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Occupancy• FHA secondary

residence

Mixed-use property Manufactured home Other new mortgage

loans on the property you are buying or refinancing

Rental income Gifts or grants

Property You Own NEW!NEW!

SECTION 5Declarations

a) About this property and your money for this loan

b) About your finances

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Section 5a

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About this Property and Your Money for this Loan

Other applicants will need to complete the URLA Additional Borrower form.

NEW!NEW!

Section 5b

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Other applicants will need to complete the URLA Additional Borrower form.

About Your Finances NEW!NEW!

SECTION 6Acknowledgments and Agreements

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Section 6

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Layout has changed and now consists of six paragraphs, instead of the 11 enumerated items in current version.

Acknowledgments and Agreements NEW!NEW!

SECTION 7Demographic Information

Applicants will need to complete this section or select the option to skip this section.

Complies with the new demographic data collection under HMDA –effective January 1, 2018.

Demographic Information Addendum can also be used in lieu of the current Section X – Information for Government Monitoring Purposes.

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Section 7

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Demographic Information of Borrower NEW!NEW!

– Expanded sub-categories under race American Indian or Alaska

Native Asian Native Hawaiian or Other

Pacific Islander

– Expanded category under ethnicity

– Identification of how the data was collected

– Identification of medium used to collect data

SECTION 8Loan Originator Information

Provides borrowers with contact information for the institution and the loan officer that will originate the loan

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Section 8

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Email address State license ID#s

Loan Originator Information NEW!NEW!

Lender Loan Information Section

Property and Loan

Information

TitleInformation

MortgageInformation

Qualifying the Borrower

Homeownership Education

and Housing Counseling

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Property and Loan Information

Section L1

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Title Information

Section L2

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Mortgage Loan Information

Section L3

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Qualifying the Borrower – Minimum Required Funds or Cash Back

Section L4

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Qualifying the Borrower – Minimum Required Funds or Cash Back

Section L4

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You Can Modify the Form

Lender Loan Information

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– Font – Text format– Title/heading tabs– Sections– Page size, numbering, and shading

– Tables– Check boxes, radio buttons– Dollar amounts– Multiple borrowers– State disclosures– Barcodes

Refer to Fannie Mae’s Rendering Options for the Uniform Residential Loan Application (URLA) document for specifics:

How to Submit the Form

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01Electronically – Dynamic VersionCan be expanded as needed; institution can customize more, which can help to shorten the length of the application.

Paper VersionPlease note the New HMDA requirements must be reported in March 2018 using the internet-based submission tool.

Electronically – Interactive VersionMay require the use of a continuation sheet to accommodate additional information, which can extend the application.

Spanish Translation Aid to URLA Form

URLA – Borrower information

URLA – Additional borrower URLA – Unmarried

addendum URLA – Continuation sheet URLA – Demographic

Information Addendum

Other Languages for Forms

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“These non-executable URLA formsare translated in Spanish to assistborrowers in completing them. “

Compliance Considerations by Regulation

• Regulation B/ECOA (§ 1002.5)– The redesigned URLA without any modification is in compliance with § 1002.5(b) – (d)– Modifications to the form will need to be verified for compliance with Regulation B

requests for information

• Regulation C/HMDA (§ 1003.4(a)(10))– The redesigned URLA and the Demographic Addendum accommodate the new HMDA

reporting changes for ethnicity and race, and complies with the HMDA information collection process effective January 1, 2018

– The new forms can be used prior to the mandatory HMDA deadline of January 1, 2018. Institution should only report the aggregated categories and codes for race and ethnicity as

provided in filing instructions for HMDA gathered in year 2017

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Potential Industry Concerns

• The number of forms and time it to takes to complete is increasing

• Consumers may object to the intrusiveness of the request for additional information

• Cost to institutions using paper copy will increase

• Automated underwriting systems and document preparation systems will need to undergo substantial technological changes and updates

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https://www.fanniemae.com/singlefamily/uniform-residential-loan-application

Resources

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Instructions

Rendering design options

Interactive and dynamic URLA forms

Spanish URLA forms

Sample applications for a purchase or refinance transaction

©2016 FIS and/or its subsidiaries. All Rights Reserved. FIS confidential and proprietary information.

CRI.Education@fisglobal.com | 800.547.2462 www.fisglobal.com/RISC

©2016 FIS and/or its subsidiaries. All Rights Reserved. FIS confidential and proprietary information.