Financial forms don't change much, very often. Many have remained the same for the past two decades. That was until the major shifts with the Loan Estimate and Closing Disclosure instituted under the new TRID rules. Now, the Uniform Residential Loan Application or Form 1003 or Form 65 is being changed. It has been used as the standard industry form by lenders when they need to evaluate a borrower before granting a mortgage loan. It has changed a little over the past couple of decades, and it's about to change again.
Changes to the URLA were announced to the mortgage industry in August of 2016. This was done to give companies the time necessary to create a transition plan and get supporting systems in place, such as the ULAD or Uniform Loan Application Dataset. Lenders also needed the time to make changes to the AUS or automated underwriting systems they use.
Most of the changes to this form come from the Home Mortgage Disclosure Act and the increased requirements for reporting. The new URLA has been designed to provide lenders with more information about race, ethnicity and genders. The goal of the changes is to ensure discrimination isn't taking place in the lending industry. Subcategories will be used to collect more information about ethnicity and rage, which will help organized the data into a more usable format.
The new URLA will also be more consumer-friendly because the format will be similar to the Loan Estimate and Closing Disclosure forms, which was redesigned. With a clearer form, borrowers will have a better understanding of the details throughout the process. Lenders will be able to gather more accurate information and assess the risk of a buyer in a better way.
Currently, there is no date set for the form to take effect. Originally, it was estimated that the form would take effect in January of 2018. However, the new form has been released for lenders to start using as of January 2017, but it's up to the lender, and not required yet. Freddie Mac did state in a release that they want to provide lenders with better information by mid-2017 when it comes to the URLA and the AUS specifications. The form may become a mandate on January 1, 2018, but may be pushed back. A date will likely be announced later this year, but some lenders have already started to use the form in order to work out any issues within their systems.