|Interpretive CommentsRemember that the loan application has not had a major overhaul in approximately 20 years.
There will be five sections to the appraisal (links below) broken down into these categories:
- Borrower Information
- Additional Borrower
- Unmarried Addendum
- Lender Loan Information
- Continuation Sheet
Take a look at each of these. The new application does look very 21st century.
Here is a shared announcement clip from the materials, which shows expected timelines on the optional use and required “use by” dates. It is likely that all the IT folks at your employer and those of LOS vendors are working overtime to get the data points in their system, so that the systems you use will be ready to go by at least the mandatory date in February 2020.
And we all know time flies, so it will be here before we know it. Remember TRID?
Also remember that there are big data collection changes coming for the HMDA collection requirements that go into effect January 1, 2018. This is causing a bit of a disconnect because the old application does not have the new fields required and the new application will not be available until July 1, 2019.
You will recall that in 2015, the CFPB published their final rule amending Regulation C, which is the Home Mortgage Disclosure Act (HMDA). The final rule amended and modified reportable data requirements on what is known as the Government Monitoring Section, which collects information on ethnicity, race, and sex.
The industry is transitioning to a more politically correct moniker for the collection of this information and is now calling it “Demographic Information”, but it still collects what it used to collect with additional ‘subcategories’.
You will want to provide a Demographic Information Addendum to capture the newly required HMDA data collection information until such time that the new 1003 is ready for use. When using this new data form, and using current URLA, you will need to cross out the old Section X of the current URLA, or otherwise delete it.
Fannie and Freddie maintain a shared FAQ document, and I provided a link at the bottom of this article for you to access it.
Loan Originator/Processor/Closer/Underwriter/Manager/Owner Interpretation
Jump around within the new 1003 sections and become familiar with the fields and how it is set up. Check with your lender / employer / wholesaler to make sure you are appropriately using the Demographic Information when required so that you can stay compliant with HMDA data requirements. Remember that all of the new data collected under HMDA, which starts January 1, 2018, can be tied directly back to your individual license number, so you want to make sure your loan data is completely correct.