Joint Trades Letter to FHFA re Improving Language Access in Mortgage Lending and Servicing

July 31, 2017


The Honorable Melvin L. Watt


Federal Housing Finance Agency

400 7th Street, SW

Washington, DC 20219


cc: Office of Housing and Regulatory Policy



RE: Improving Language Access in Mortgage Lending and Servicing


Dear Director Watt:


The American Bankers Association (ABA), the Consumer Bankers Association (CBA), the Housing Policy Council of the Financial Services Roundtable (HPC), and the Mortgage Bankers Association (MBA), which together represent the banking and real estate finance industries, thank the Federal Housing Finance Agency (FHFA) for the opportunity to respond to the May 2017 Request for Input (RFI) on issues faced by qualified borrowers with Limited English Proficiency (LEP) throughout the mortgage life cycle, including mortgage lending and servicing.1


Our members strongly support efforts to better understand the unique challenges relevant to LEP borrowers and to better serve the LEP population with safe, sustainable, and affordable mortgage credit. To further these objectives, we believe the best course of action for FHFA, other government agencies, Fannie Mae and Freddie Mac (the Enterprises), lenders, servicers, and other interested stakeholders is the pursuit of a holistic strategy that identifies LEP-specific barriers to homeownership, allocates resources to reduce these barriers in a cost-effective and practical manner, and minimizes confusion among all parties, including LEP borrowers. We understand this RFI to represent the beginning of this process, and we look forward to identifying ways to improve the mortgage finance system infrastructure to better accommodate LEP borrowers.


Considering our belief that a holistic approach to these important issues is essential, we are extremely concerned about the possibility of FHFA and the Enterprises prematurely including a question regarding the language preferences of potential borrowers on the Uniform Residential Loan Application (URLA) at this time. While we appreciate FHFA’s stated position that the inclusion of such a question “not create new obligations or liabilities for the originator, servicer, or other parties, not create new rights for borrowers, and not create borrower expectations that the transaction will occur in a language otherthan English,”2 we believe that its inclusion prior to resolution of the concerns enumerated below will mislead borrowers, increase costs for consumers, and open lenders, servicers, and secondary market investors to possible legal liability. It is more appropriate, and more beneficial for potential LEP borrowers, that future efforts determine where additional resources should be deployed and where regulatory gaps may exist. Far more guidance and clarification—not the inclusion of a question on the URLA—will meaningfully address the needs of LEP borrowers...(continue reading)