• Bill Corbet

Is Coal Lurking in Your URLA Stocking?

By Bill Corbet, Managing Director - Strategy


For 2020 the enduring acronyms will be COVID, PCR tests and many others that we hope to forget, but never will.


But the acronyms don’t stop there as we roll into 2021, in the financial services and mortgage banking industry there are several acronyms that will prevail and shape our first quarter. Acronyms like UMDP, URLA, and ULAD. So, are you ready?


Fannie Mae and Freddie Mac (the GSE’s) have been on a multiyear journey to update their infrastructure through the Uniform Mortgage Data Program (UMDP) with some major new components, the new loan application (URLA) and the underlying data set used for automated underwriting (ULAD).


The introduction of the new URLA will be required for new applications starting on March 1, 2021. While the technology vendors have been hard at work to prepare for its release, some offering it more sooner than others, the anxiety continues to build.


This customer facing document, which has been largely unchanged for decades, will undergo material data and format, application flow changes. Subsequently, the anxiety and need for effective deployment within lending institutions remains warranted. However, lurking below the application – it is the underlying data where the risks may lie.


Fact is the document itself is in the part of the ice burg that is above water. The underlying dataset is the 90% of the ice burg that is below the waterline. As March 1st nears, organizations need to not only need to prepare the staff for the 10% but be especially focused on the 90% where the risk is – interviewing, vetting, documenting, and remediating for successful testing.


I will pause here, so you can read the former paragraph again...


Now, I will ask, are your business partners ready?


For years, the FNMA 3.2 file data set has long been the industry standard for defining what data needed to be extracted and used for reporting as well as the transferring of the 3.2 data to order third party services. While your firm might be ready, or be nearly ready, for the consumer engagement side, are your business partners ready? During a recent BlackFin Group mortgage operations business review we exposed a major gap at our lender partner: the lender has an appraisal order process where the order requires transferring a FNMA 3.2 file data set. This has worked well for years, but when investigating if the appraisal vendor themselves are ready to accept both the new file format or the old format (since old and new will run in parallel for quite a while) – the discussion was met with radio silence. We quickly realized we had to vet the situation further and define a workaround. That was just one of the myriads of vendors they work with.


Again, while the LOS vendors are doing a good job on their core build, the do baseline URLA transition, the back office URLA data set is where we at BlackFin Group and lenders will need to be focusing 90% of the URLA energy.


What will you find in your stocking this holiday season, gifts galore or coal? Half of being prepared is making sure you are asking the right questions. January 1st, the official URLA 90-day countdown begins, start your URLA validation early to make it a happy URLA new year.

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