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FHFA Announces Mandatory Use of the Supplemental Consumer Information Form

The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac will require lenders to use the Supplemental Consumer Information Form (SCIF) as part of the application process for loans that will be sold to the GSEs. The purpose of the SCIF is to collect information about the borrower's language preference, if any, and on any homebuyer education or housing counseling the borrower received, so lenders can better understand borrower needs during the home buying process.

The SCIF will be available via Mortgage Translations later this summer. Created by FHFA, Fannie Mae, and Freddie Mac, Mortgage Translations provides resources to assist lenders, servicers, housing counselors, and others in helping mortgage borrowers who have limited English proficiency. The site contains documents and resources available in English, Spanish, traditional Chinese, Vietnamese, Korean, and Tagalog. Mortgage Translations is part of FHFA's Language Access Multi-Year Plan.

"Collecting language preference and housing counseling information provides mortgage applicants with an additional method to inform lenders of their needs, enabling the industry to more fully respond to the nation's growing diversity," said FHFA Acting Director Sandra L. Thompson. "These steps will contribute to an equitable housing finance system that welcomes all qualified borrowers."

Specifically, the FHFA’s changes announced will require lenders to present the SCIF questions to borrowers and to report any data collected from the SCIF to the GSE purchasing the loan. Lenders will be required to adopt these changes and report requirements for loans with application dates on or after March 1, 2023. Response by borrowers to the preferred language question in the SCIF will remain voluntary.

“Today’s action from the FHFA is a long-overdue step to ensure that our housing system serves all eligible homebuyers,” said U.S. Sen. Sherrod Brown, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs. “I applaud Acting Director Thompson for taking this important action to improve the mortgage process.”

Rohit Chopra, Director of the Consumer Financial Protection Bureau (CFPB), added, “The CFPB welcomes the FHFA's announcement today. As those lenders and financial companies that already collect the language preference of applicants and borrowers know, this information allows lenders to serve their customers better. The collection of applicants' language preference does not violate the Equal Credit Opportunity Act or its implementing regulations. The CFPB is eager to see advances in broader language access to better serve all borrowers."

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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