Department News COMPLIANCE
Redesigned Uniform Residential Loan Application (Form 1003) By Gina Jolly, CRCM, Vice President of Compliance Services
Fannie Mae and Freddie Mac (the GSEs) redesigned the Uniform Residential Loan Application (URLA) (Fannie Mae Form 1003) to help lenders better capture relevant loan application information and support the industry’s move to digitize the loan origination process. Te redesigned URLA was first announced in August 2016.
Te Form 1003 implementation timeline was extended in April 2020 because of the COVID-19 pandemic. Tis delayed the “Open Production” period, which is the earliest effective date for the revised URLA, to Jan. 1, 2021. Aſter this date, lenders may begin submitting the updated URLA to the secondary market. Lenders must use redesigned Form 1003 for all new loan applications received on or aſter March 1, 2021.
DO WE HAVE TO USE THE NEW URLA? If your bank does not sell and/or service loans on the secondary market and you only keep loans “in-house” you may use the new URLA, but you are not required to use it. However, if you are a HMDA bank, you will want to ensure you are using a demographic information form that includes expanded demographic information. If you are not a HMDA bank, you have the option to collect either the government monitoring information as required by Regulation B or the expanded data.
Te new Form 1003 was redesigned to address common issues. one-borrower form design (no more double columns) similar look to Loan Estimate and Closing Disclosure indication that entire sections are not applicable most likely choices for asset, liability and income types eliminate nonstandard responses
New sections of the URLA include the following. A section captures subordinate liens on the subject property. For purchases, expected monthly rental income on the subject property is collected.
Giſts and grants are collected at the loan level. Updated sections make it easier to input borrowers who are sharing liabilities and assets to avoid duplicate information.
WHAT NOW? If you haven’t already, review and download the final updated URLA (
fanniemae.com/urla). Review the updated URLA instructions with staff to ensure the intention of each form field is well understood. You also will want to regularly check Fannie Mae’s URLA webpage for additional updates to supporting documents. It’s also important to review your bank’s internal policies and procedures to determine if the changes to the URLA will require policy and/or procedure updates.
This article is for information purposes and does not contain or convey legal advice. The information should not be used or relied upon in regard to any particular situation without consultation with your bank attorney. MBA Compliance Services and its Compliance Force program information, call 573-636-8151.
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