The Uniform Residential Loan Application (URLA) form for the mortgage industry is undergoing change for the first time in 20 years. Also known as the Freddie Mac Form 65 / Fannie Mae Form 1003, URLA is a standardized document used by borrowers to apply for loans.

Borrowers are now required to provide additional information to help make underwriting decisions. To ensure consistent data delivery, corresponding changes in MISMO (Mortgage Industry Standards Maintenance Organization) v3.4 dataset, a.k.a. the Uniform Loan Application Dataset (ULAD) have also been made. The updated URLA has additional data point collection requirements but uses simplified terminology, making it easier for borrowers to complete.

Lenders can begin using the redesigned URLA for new loan applications starting July 1, 2019. Using the new form becomes mandatory on February 1, 2020¹.

If not already, lenders should be in the final planning for the new URLA and its impact to systems and organizational change management. The four key steps lenders should take to implement the new URLA are:

• Updating policies and processes: To ensure that lenders are compliant with no disruption to operations, there are loan origination platforms that have been pro-actively re-engineered and thoroughly tested to support the redesigned URLA. To ensure your loan origination platform is aligned with URLA requires meticulous planning and execution. The first step to becoming URLA compliant is to ensure that your platform has all the new application forms and processes in place.
  
• Preparing to collect new data: Identify all data fields that need to be captured (input) for reporting (output) as per the redesigned URLA. Technology providers should be leveraged to create the appropriate interfaces in LOS to meet the new data requirements. Finally, an audit process and testing of the updated platform--to ensure it is aligned with Fannie Mae and Freddie Mac’s new URLA—should be undertaken and completed.
• Training staff: The new URLA forms are not perfectly aligned with the Home Mortgage Disclosure Act (HMDA) data collection requirements. This means training staff, especially underwriting and consumer facing staff, in the importance of URLA and HDMA policy manuals. Most home buyers are not accustomed to completing forms and loan experts can ensure that borrowers complete forms for quick processing.
• Ensuring loan origination systems support new form, workflow, automated underwriting systems (AUS) and import/export functionality: URLA is the first major update in loan processes in decades. This means set processes and systems will need changes. Once systems have been updated for the new workflows, they must be thoroughly tested to ensure they don’t result in bottlenecks and unnecessary delays.

We at Wipro Gallagher Solutions, are focused on educating our customers, partners and prospective clients on the significant impacts that the new URLA may have on their organizations. Watch our webinar to understand in detail, the key steps lenders should take to implement the new URLA. 

Reference

¹https://www.fanniemae.com/content/tool/urla-timeline.pdf

Paul Christison

Wipro Gallagher Solutions Compliance Delivery Manager

Paul joined Wipro in July 2011 with more than 20 years of experience in mortgage operations, executive leadership, compliance and IT solutions. Following his passion for IT lending solutions, he holds SCRUM Master, LEAN, 6Sigma Yellow Belt and Para Legal Certificates. Personal Mission: Delivering forward thinking, industry leading solutions that make users say, “Wow!”