Articles
Mortgage Servicers Must Improve Support for Borrowers with Limited English Skills
Mortgage servicers must provide language resources for borrowers with limited English proficiency (LEP). The 2020 Census confirmed what mortgage professionals have experienced over the past decade - America’s diversity increases every year with minority homeownership growing rapidly. The National Association of Hispanic Real Estate Professionals predicts that over the next 20 years, 70 percent of homeownership growth and 53 percent of new household formations will come from Latinos.
Mortgage industry regulators mandate that lenders and servicers must treat all mortgage borrowers fairly and provide equal access to services regardless of the consumer’s ability to speak English proficiently. Accordingly, Fannie Mae and Freddie Mac (the Enterprises) will soon require lenders to include the Supplemental Consumer Information Form (SCIF) in the application process for loans that will be sold to the enterprises. The SCIF collects information about the borrower's language preference, if any, and any homebuyer education or housing counseling the borrower received, so lenders can better understand borrower needs during the home buying process. Lenders will be required to present the SCIF questions to borrowers and report data collected from the SCIF to the Enterprise purchasing the loan—beginning with loan application dates on or after March 1, 2023. The SCIF will be available via the Mortgage Translations clearinghouse later this summer (2022).
Mortgage servicers can improve servicing for LEP borrowers by knowing the requirements re: language access for LEP borrowers; sharing language resources; and using mortgage servicing software to indicate borrowers' language preference.