0
0
Did you know that the Federal Housing Financing Agency (FHFA) put out a Request for Input for Improving Language Access in Mortgage Lending and Servicing?
You should respond because what they propose may have a drastic impact on how mortgage lending and servicing is done in the future.
The gist of the proposal is to explore ways to better serve the needs of applicants and borrowers with limited English proficiency (LEP) when getting their loan and during the time it is serviced until pay off.
For purposes of this RFI, individuals who have a limited ability, or no ability, to read, speak, write, or understand English are referred to as limited English proficiency or LEP borrowers.
Individuals who are able to read, speak, write, and understand English but prefer to communicate in a language other than English are referred to as preferred language or PL borrowers
These proposals ask for input from lenders on such things as:
- How and when do industry participants typically learn a borrower has limited English proficiency?
- To what extent are existing translated documents used by the industry?
- To what extent are bilingual staff or translation services used to assist LEP/PL borrowers?
- Identify any practices that could be particularly effective in ensuring LEP borrowers can understand and participate in the mortgage process.
- Should more documents be available in other preferred languages?
FHFA suggest that data on a borrower’s language preference could be collected on the URLA by adding an additional question. Thus, allowing the applicant to identify their preferred language for communication during the handling of the loan.
They believe this benefits both the consumer and the lender or servicer. Lenders can then communicate, if they so choose, to speak with the mortgagor in their preferred language.
You can read the full proposal HERE.
MBA and the industry have some concerns. You can read MBA’s comments HERE.
MBA fears the proposed preferred language question on the URLA may open a whole new can of worms for mortgage lenders and servicers already under a barrage of regulatory requirements. I agree…
Some of my concerns are:
- Will the borrower understand that not all lenders have services for communication in their preferred language?
- Will lender ultimately be forced to provide services in all preferred languages?
- How many ‘translated’ documents may be required in the future?
- Will every LOS and other systems need to be configured to operate and create information and documentation in multiple languages?
- Where does it all stop?
Maybe technology is once again the answer. There are already systems in other industries that can operate and create information and documentation in multiple languages at the same time. An LO can speak and read in English while the applicant will hear and see in their ‘preferred language’.
Will the end ultimately be, “Hey what the heck, just because someone buys a home, works, and lives in America, that’s no reason why they should read and understand English. We’ll just translate everything for them and when there’s a problem, the lender gets blamed.”
I’m all for helping people to better understand the home buying and ownership process and responsibilities, but there must be some limits. I believe the FHFA proposal goes beyond those limits.
What do you think?
