NMP - November 2019 - 16

✒

GSEs Announce
Publication of Update
to Redesigned URLA
By Gavin T. Ales

O

n Oct. 23, 2019, Fannie Mae and Freddie
Mac (the GSEs) announced the publication of
the updated redesigned Uniform Residential
Loan Application (URLA-Fannie Mae Form
1003/Freddie Mac Form 65). Appendix 1 of
the announcement provides a detailed
description of changes that have been made to the Borrower
Information, Additional Borrower Information, Lender Loan
Information, Continuation Sheet and Unmarried Addendum
documents.
According to the announcement, the GSEs are providing
the static components of the updated form that include all the
changes made to the form appearance. The changes, which
were made at the direction of the Federal Housing Finance
Agency (FHFA), were previously outlined in an August 2019
announcement from the GSEs and include:

l Removal of The Language Preference question (Borrower
Information, Section 1a) and The Homeownership
Education and Housing Counseling question (Lender Loan
Information, Section L5.) Instead, this information will be
collected on a separate "Voluntary Consumer Information
Form" still to be developed for this purpose.

NOVEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

16

l The Acknowledgment and Agreements (Borrower
Information, Section 6) has been updated with new "Use
and Sharing of Information" language and new definitions
for "Lender" and "Other Loan Participants."
l The Military Service question has been moved from
Borrower Information, Section 1a. to Section 7: Military
Service. An additional line of instruction has also been
added, which states, "This section asks questions about
your (or your deceased spouse's) military service."
l Borrower Information sections have been renumbered.
Demographic Information has been moved from Borrower
Information, Section 7 to Section 8. Loan Originator
Information has been moved from Borrower Information,
Section 8 to a new Section 9.

NMP NEWS FLASH
continued from page 15

highest share of refinance activity
since Ellie Mae began tracking
this data in January 2016.
The share of refinances for
conventional loans was 40
percent, up 11 percent from
August to September. For VA
loans, refinance share increased
10 percentage points to 48
percent. And the share of
refinances for closed FHA loans
was up by a relatively mild one
percentage point to 10 percent.
The average FICO score for
Millennial borrowers in September
was 729, higher than at any other
point this year.
"Throughout 2019, we've
seen Millennials refinancing in
order to take advantage of low
interest rates and in September
about one out of every three
loans closed by this
demographic was a home
refinance, the highest share
we've seen since we launched
the Millennial Tracker in January
2016," said Joe Tyrrell, chief
operating officer at Ellie Mae.
"Lenders have done a great job
educating Millennials on
recognizing refinance
opportunities and as a result,
this demographic has been able
to lock in historically low rates.
Going forward, we'll be keeping
a close eye on how these rates
impact Millennials looking to
make a home purchase as well."

Gavin T. Ales is chief compliance officer with
Torrance, Calif.-based DocMagic Inc. He may be
reached by phone at (800) 649-1362, ext. 6446 or
e-mail Gavin@DocMagic.com.

SPONSORED EDITORIAL

Fraud Costs for Lenders
on the Rise

Early-Stage Delinquencies
Inch Up Among Purchase
Loans

l Other additional minor edits have been made throughout
the URLA form, such as date formats and additional
instructions.
The GSEs confirmed that the dynamic version of the
redesigned URLA has been retired. The static version is being
provided in advance of the publication of an additional
interactive (fillable) PDF version which is expected to be
available in early 2020, to allow the industry time to "scope
additional work needed to implement the redesigned form."
New dates for an implementation timeline and mandate are
expected to be released by the end of the year. DocMagic will
continue to provide updates as further information becomes
available.

Black Knight Data & Analytics
President Ben Graboske noted
the one percent figure was "less
than one-third of the 2000-2005
average of 2.95 percent, it
represents a more than 60
percent increase over the last
two years and is the highest it's
been since late 2010. Earlystage GSE delinquencies
currently stand at 0.6 percent,
up two tenths of a percentage
point over the past 24 months,
but still 40 percent below the
market average and 60 percent
below their own 2000-2005
average of 1.3 percent."
Graboske added that while
purchase loan performance has
seen some softening, "it hasn't
been to the extent seen among
entry-level buyers. All in all,
first-time homebuyer
originations combined between
the GSEs and GNMA increased
by nearly 50 percent between
2014 and 2018. However,
whereas first-time homebuyers
represent just over 40 percent
of GSE purchase loans, they
make up 70 percent of the
GNMA purchase market."

Nearly one percent of
originations in the first quarter
of this year were delinquent six
months post-origination,
according to new data from
Black Knight Inc.
The increase was mostly due
to early-stage delinquencies
among purchase loans and firsttime homebuyers. An uptick in
debt-to-income ratios rooted in
home affordability pressures
was pinpointed as one of the
likely causes for this trend,
although repeat purchasers
faced the same affordability
challenge and performance
among that group has been
steadier.

For every dollar lost in fraud,
financial services companies
incur $3.25 in costs, according
to the 2019 True Cost of Fraud
study released by LexisNexis
Risk Solutions. This level is up
11.3 percent from the $2.92 in
costs recorded in 2018.
Lenders see $3.44 in costs
for every dollar of fraud loss, up
from $3.05 in 2018, a 12.8
percent rise. Banks and credit
lenders, in particular, were
found to have the highest costs
of fraud with year-over-year
increases of 17 percent and 16
percent, respectively.
The study attributed the
increasing fraud risk to several
trends, including the expansion
of mobile banking options at a
rise in botnet activity. Fraud risk
related to international
transaction volume is up among
both mid- and large-sized digital
continued on page 18


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NMP - November 2019

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