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Get ready for more Summer fun and Grab Your Favorite Weekend Cocktail, as Fannie and Freddie make revisions to the URLA (Universal Residential Loan Application) this Summer.  There is no doubt that changes are overdue as many parts of the URLA are outdated, but the changes in the Government Monitoring Information areas will make your brains spin!

Many people thought it was Earth shattering when a small line called “Ethnicity” was added.  Wells folks you won’t believe the detailed information you will now need to provide!

Before I discuss those changes, let’s talk about why these changes have occurred.  We all know that the Government Monitoring Information is asked, for the purposes of communicating that data to a lender’s HMDA report.  The HMDA report information is public information and is used by regulators to ensure a lender is lending fairly.  It is also used by think tanks, consumer advocates and others, to study lending patterns for funding efforts; or to highlight discriminatory behavior.

Dodd-Frank mandated some fields and the CFPB has added more, which doubles the amount of data reported.  What isn’t talked about is that under Race and Ethnicity the data required has exploded! According to the evaluators of this data, the information was not expansive enough to properly make reasonable hypotheses.   This is being done so that the evaluators of this information can further dissect the data, in the hopes of being more accurate in their hypothesis of the data.

My brain hurts just thinking of the possible scenarios statisticians can come up with.  And why are Black/African American people and White people not given any options for country of heritage?

Be Ready, because here are the changes!

Big Paragraphs Explaining it:

“The purpose of collecting this information is to help ensure that all applicants are treated fairly and that the housing needs of communities and neighborhoods are being fulfilled.  For residential mortgage lending, Federal Law requires that we ask applicants for their demographic information (ethnicity, race, and sex) in order to monitor our compliance with equal credit opportunity, fair housing, and home mortgage disclosure laws.  You are not required to provide this information, but are encouraged to do so.  You may select one or more “Hispanic or Latino” origins and one or more designations for “Race”.

The law provides that we may not discriminate on the basis of this information, or on whether you choose to provide it.  However, if you choose not to provide the information and you have made an application in person, Federal Regulations require us to note your ethnicity, race and sex on the basis of visual observation or surname.  If you do not wish to provide some or all of this information, please check below.”

Applicant and Co-Applicant Information-Each applicant gets their own column to fill out

Ethnicity

___Hispanic or Latino? If Checked then they may check “one or more” of the following:

-Mexican

-Puerto Rican

-Cuban

Other Hispanic or Latino-Print Origin (in small little boxes), for example, Argentinean, Columbian, Dominican, Nicaraguan, Salvadoran, Spaniard, and so on: (Good luck with this one technology developers)

____Not Hispanic or Latino

____I do not wish to furnish this information

Race

____American Indian or Alaska Native? – Print name of enrolled or principal tribe: (in little boxes and free form)

____Asian

-Asian Indian

-Chinese

-Filipino

-Japanese

-Korean

-Vietnamese

-Other Asian-Print race (in little boxes), for example, Hmong, Laotian, Thai, Pakistani, Cambodian, and so on:

____Black or African American (sorry you only get one box)

____Native Hawaiian or Other Pacific Islander

-Native Hawaiian

-Guamanian or Chamorro

-Samoan

-Other Pacific Islander-Print race (in little boxes), for example, Fijian, Tongan and so on:

____White (sorry you only get one box too)

____I do not wish to furnish this information

Sex

  • Female
  • Male
  • I do not wish to furnish this information

To Be Completed by Financial Institution (for application taken in person and per applicant);

Was the ethnicity of the applicant collected on the basis of visual observation or surname? (Yes or No)

Was the race of the applicant collected on the basis of visual observation or surname? (Yes or No)

Was the sex of the applicant collected on the basis of visual observation or surname? (Yes or No)

This is going to be a programming nightmare so get your developers or your vendors on this train right away.  There are many more implications of this data which I will discuss in future postings, so stay tuned!

Tammy Butler, Master CMB

Author Tammy Butler, Master CMB

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