CAPAC Leaders Denounce Trump Administration Decision to Remove Preferred Language Question on Loan Applications

Aug 15, 2019

Washington, DC — Today, Congressional Asian Pacific American Caucus (CAPAC) Chair Judy Chu (CA-27) and CAPAC House Task Force Chair Al Green (TX-09) sent a letter to the Federal Housing Finance Agency (FHFA) urging the agency to reinstate a question on the redesigned Universal Residential Loan Application (URLA) form regarding the language preference of borrowers. FHFA recently announced its decision to remove this question, reversing a 2017 decision to add the preferred language question as a way to better understand the unique challenges Limited English Proficient individuals face when undergoing the home buying process. CAPAC Members released the following statements:

Congresswoman Judy Chu (CA-27), CAPAC Chair:

“I am extremely disappointed by FHFA’s decision to remove the preferred language question from the standard Universal Residential Loan Application form that borrowers use to apply for a mortgage. Over one third of Asian Americans and Pacific Islanders are limited English proficient (LEP) and struggle with language barriers that make it difficult to navigate the complex financial process of purchasing a home. This is why CAPAC urged FHFA to collect data on the preferred language of borrowers in order to better understand and address the growing needs of limited English proficient homebuyers, particularly those within the AAPI community. It is alarming that the Trump Administration has chosen to arbitrarily remove this question and put AAPI homebuyers at risk. I urge FHFA to reverse its decision and restore the language preference question to the URLA.”

Congressman Al Green (TX-09), CAPAC Housing Task Force Chair:

“I strongly oppose FHFA’s arbitrary decision to eliminate the critical language-preference question from the Uniform Residential Loan Application (URLA). The 2008 financial crisis caused countless borrowers to lose their homes because language barriers made it impossible to comprehend the terms of the loans some of them received.  Access to credit and homeownership, a common struggle for far too many new Americans and immigrant communities, should not be denied because of limited English proficiency. ”

The full text of the letter can be found below.

Dear Director Calabria:

On behalf of the Congressional Asian Pacific American Caucus (CAPAC), we write to express our strong opposition to your recent decision to remove the borrower’s language preference question from the redesigned Uniform Residential Loan Application (URLA) form.

This mortgage application form was revised on October 20, 2017 to prioritize access to credit and homeownership for qualified mortgage borrowers with limited English proficiency (LEP). As LEP homebuyers make up a growing share of the mortgage market, mortgage originators and servicers have an obligation to ensure that LEP homebuyers have the resources they need to make informed decisions throughout the significant and complex process of purchasing a home. This is why the inclusion of this question on the URLA form is necessary for LEP individuals who struggle to communicate with mortgage servicers and originators.

We are deeply concerned about the impact your decision to remove this question will have on Asian American and Pacific Islander (AAPI) homeownership. The AAPI community has one of the highest rates of LEP persons with over one third of AAPIs being limited English proficient. AAPI homeownership also continues to fall behind the national average due to a number of factors, including language barriers and lack of understanding of the home buying process. For instance, LEP homebuyers often misunderstand the terms of their mortgages due to language barriers, such as believing they have a fixed-rate mortgage when the rate is in fact adjustable. Language barriers also are significant factors when homeowners fall behind on their mortgage payments and are forced to navigate the complex financial landscape of the loss mitigation process.

It is for these reasons that CAPAC urged the creation of a standardized question on the URLA, the mortgage application form used by virtually all lenders, to indicate the borrower’s preferred language. The inclusion of preferred language data fields in the URLA would ensure that this important information is collected from virtually every homebuyer, included in the Uniform Mortgage Data Program, and used to provide a clear process for mortgage originators and servicers to identify their customers’ language needs. Moreover, the question includes disclosure language to mitigate legal concerns raised by lenders and does not obligate mortgage originators and servicers to conduct communications in the preferred language of the borrower, as noted on the URLA form.

As such, we urge you to immediately reinstate the borrower’s language preference question on the URLA and ensure that all Americans, regardless of their language proficiency, have equal opportunities and access to homeownership.

Sincerely,

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The Congressional Asian Pacific American Caucus (CAPAC) is comprised of Members of Congress of Asian and Pacific Islander descent and Members who have a strong dedication to promoting the well-being of the Asian American and Pacific Islander (AAPI) community. Currently chaired by Congresswoman Judy Chu, CAPAC has been addressing the needs of the AAPI community in all areas of American life since it was founded in 1994.