Best practices to prepare for the new URLA

Author: John Haring, Director, Product Management at Ellie Mae

February 1, 2020 may seem a long way off now, but lenders have a huge undertaking to prepare their workflow and teams for the new Uniform Residential Loan Application (URLA) in time for that fast-approaching mandatory implementation date. And serving as the backbone of the mortgage manufacturing process, the potential disruption from the new form could be as bad or worse than the TILA-RESPA Integrated Disclosure Rule that went into effect back in October 2015. So, with a little more than six months to prepare, there is no more time to waste waiting to plan your transition. Act now by taking the below steps to protect your organization from disruption and ensure your smooth implementation of the new form.

Don’t wait to begin your planning

In the wake of last month’s announcement that the GSEs postponed the optional use period for the new URLA, many lenders are choosing to put off planning for the changes. In fact, our recent survey showed that only 33% of lenders today have started preparing. By waiting to plan their transition, these lenders may be jeopardizing both their consumer loan application process and their workflow come February, 2020. To be ready for the transition in time, lenders should start preparing now.

Actions to take to successfully manage your transition

Now is the time to start formulating your implementation plans to minimize disruption to your business. There are many factors that you need to consider and plan for including training, testing, operations, and technology. Kick start preparing for your transition and make sure you don’t miss a step by completing the below tasks well in advance.

  1. Start testing the new URLA: Test the new URLA and associated workflow in your mortgage technology platform as soon as possible and use this time before implementation to train employees; update platforms, customizations and plug-ins; and prepare for a full-scale launch.
  2. Make sure you have the right technology in place: Technology will be impacted at every stage of the origination process, from pre-qualifications to underwriting and investor relations. Your loan origination and point-of-sale systems will need to be modified and now is the time to strategize with your technology partner.
  3. Know your data requirements: Familiarize yourself with both the reorganized and new data required in the revised application form across each of the loan programs you offer.
  4. Consider compliance: Keep in mind that the Equal Credit Opportunity Act (ECOA) establishes that using the URLA as published by the GSEs grants safe harbor under federal law. Reduce your risk of potential violations by modelling your application procedures on the new URLA.
  5. Understand investor requirements: Keep your investors’ needs in mind and start having conversations now to understand where each investor stands in the transition process.

There’s risk to delaying your planning

Those lenders who do not prepare their workflow and teams well in advance of the mandatory implementation deadline expose themselves to risks that could severely disrupt their business including:

  • The inability to sell loans on the secondary market whether to aggregators or directly to the GSE’s
  • A broken workflow and loss of productivity
  • Falling out of compliance with ECOA
  • Breaking API-enabled applications
  • Frustration from teams not trained in time
  • A poor customer experience and longer loan cycles

Comments from lenders who have started their URLA journey

“There are a lot of origination platforms out there in the market. We continue to utilize Ellie Mae because of their track record of consistently delivering support for these large-scale industry changes such as the new URLA.”

- Brandon Durham, Production Support Manager at Homeowners Financial Group

“I’m really excited for Ellie Mae’s approach to the new URLA. They have a great reputation for being well prepared, having a pulse on what is happening in the industry and the ability to shift resources where and when they are needed because of their size to deliver what is needed.”

- Jessica Sepeda, Mortgage Content, Development and Training Lead at Bell Bank

Looking for a partner to support your seamless transition?

Ellie Mae's most recent Encompass® Digital Lending Platform release delivers end-to-end support for the new URLA so lenders can start testing their new workflow as early as July. With this comprehensive support, we can help lenders enable a streamlined workflow for all aspects of their mortgage lending process from consumer engagement, originating and processing the application, through underwriting the loan to, finally, selling to investors. Testing for the new URLA workflow is now available in Encompass so our customers can stay ahead of the curve and feel confident throughout their transition.

Get more resources to prepare for the new URLA

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