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GSEs to Require Servicers to Obtain Fair Lending Data 

Starting March 1, 2023, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will be requiring servicers to “obtain and maintain” fair lending data on their loans. The data that FHFA and the GSEs will need to gather includes the borrowers’ age, race ethnicity, gender, and language. 

This announcement follows additional documentation requirements announced in May that requires lenders to use a Supplemental Consumer Information Form (SCIF) as part of the application process which will gather information about the borrowers’ language preference, and any financial counseling they received before home purchase so that lenders can better understand borrower needs during the home buying process. 

“The need for collection and maintenance of quality fair lending data is a lesson learned from the foreclosure crisis and COVID-19 response,” said Sandra L. Thompson, Director of the FHFA. “Having fair lending data travel with servicing will help servicers do the important work of providing assistance to borrowers in need, helping to further a sustainable and equitable housing finance system.” 

As per the SCIF, lenders will be required to adopt these changes and reporting 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.  

"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," said Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra. "The CFPB is eager to see advances in broader language access to better serve all borrowers." 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected].

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