FHFA Announces Update for Housing Loan Servicers to Maintain Fair Lending Data

The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac (the Enterprises) will require loan servicers to obtain and maintain fair lending data on their loans, and for this data to transfer with servicing throughout the mortgage term.

FHFA Director Sandra L. Thompson commented: “The need for collection and maintenance of quality fair lending data is a lesson learned from the foreclosure crisis and COVID-19 response,” said  “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.”​

The fair lending data to be maintained includes borrowers’ age, race, ethnicity, gender, and preferred language. Servicers will be required to implement this change starting on March 1, 2023. This update follows a May 2022 announcement, which requires lenders to collect borrowers’ language preference data.

Specifically, that announcement require lenders to use the Supplemental Consumer Information Form (SCIF) as part of the application process for loans that will be sold to the Enterprises. The SCIF collects info regarding the borrower's language preference, if any, and on any homebuyer education or housing counseling the borrower received, so lenders can better understand borrower needs during the home buying process. Lenders are 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 continue to be voluntary.

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $7.5 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter, @FHFA, YouTube, Facebook, and LinkedIn.

For more information, contact: ​Adam Russell - Adam.Russell@FHFA.gov

Read the August 10, 2022 FHFA release.

GE to Pay $1.5 Billion U.S. Fine overSubprime Mortgage Fraud.

April 12, 2019. General Electric Co will pay a $1.5 billion civil fine to resolve the US Department of Justice (DOJ) examination of defective subprime mortgages from its former WMC Mortgage unit before the 2008 global financial crisis. DOJ said the agreement resolves claims that GE concealed the poor quality of the loans and WMC’s lax fraud controls when packaging the loans into residential mortgage-backed securities that it then sold to misled investors. WMC was purchased by GE’s finance unit, General Electric Capital Corp, in 2004, and issued over $65 billion of mortgage loans in the next three years. DOJ said WMC overstated the quality of a majority of loans it packaged into residential mortgage-backed securities, and its fraudulent practices resulted in billions of dollars of investor losses. https://www.reuters.com/article/us-ge-settlement/ge-to-pay-1-5-billion-u-s-fine-over-crisis-era-subprime-mortgages-idUSKCN1RO233.