To support sustainability and equity, the Federal Housing Finance Agency (FHFA) has announced that Servicers of federally backed loans will acquire and retain fair lending data. Servicers must begin keeping records of borrowers’ age, color, ethnicity, gender, and preferred language by March 1, 2023. No matter who owns the servicing rights, the data will remain with the loan for the mortgage duration.
The foreclosure crisis and COVID-19 response have shown the Industry the importance of collecting and maintaining high-quality fair lending data, said Sandra Thompson, director of the FHFA. Fair lending information that travels with servicing will aid servicers in supporting borrowers in need and advancing a sustainable and just housing finance system.
The data must be in a queryable format, per the most recent Servicing Guides from Fannie Mae and Freddie Mac. When a servicer transfers the servicing privileges, the data must be given to the new servicer. The new servicer must store the data to supply it in subsequent transfers; however, it is not obliged to update the data points. According to Fannie Mae’s instructions for servicers, the policy modification does not apply to reverse mortgages.
This regulation is similar to one that applies to lenders who sell loans to the GSEs. The FHFA announced earlier this year that starting in March 2023; conventional mortgage lenders must gather information on language preference and housing counseling. To get more detailed information on the FHFA’s implementation of this regulation, click here.
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