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Several trade groups and organizations focused on the banking and mortgage industries recently wrote a letter to Federal Housing Finance Agency Director Mel Watt, concerning a potential last-minute addition to the new Uniform Residential Loan Application that asks borrowers to indicate their language preference. The groups pointed out that the inclusion of the question raises serious compliance and legal concerns.
According to the banking groups, a question on language preference on the URLA would come with eight consequences: Require lenders to ask borrowers sensitive questions, Create expectations among consumers that can't be met, Provide an inferior means of obtaining and analyzing data, Detract from other more promising avenues, Potentially expose lenders to liability, Open both lenders and borrowers to considerable origination costs, Open servicers to new obligations and increase borrowers’ servicing costs, and Require translation services without accompanying government or GSE materials.
A recent survey from the National Association of Realtors and SALT showed that 71 percent of non-homeowners repaying their student loans on time believe their debt is preventing them from purchasing a home. Meanwhile, over half of respondents said that they expect to be delayed from buying by more than five years.
