FHFA adds fair lending reporting mandate for servicers

The Federal Housing Finance Agency on Wednesday announced that mortgage servicers working with loans backed by the government-sponsored enterprises will need to obtain and maintain fair lending data.

The requirement, which will become effective in March of next year, is in line with the agency's ongoing push to use the GSEs' considerable influence in the market to establish a more equitable housing finance system through means that include tracking new types of data.

The FHFA characterized its latest move as building on a previous requirement to collect borrowers' language preference data, which also goes into effect on March 1, 2023, and as a response to observations related to distressed mortgage servicing amid the pandemic.

"The need for collection and maintenance of quality fair lending data is a lesson learned from the foreclosure crisis and COVID-19 response," FHFA Director Sandra Thompson said in a press release. "Having fair lending data travel with servicing will help servicers do the important work of providing assistance to borrowers in need."

The Consumer Financial Protection Bureau, which does some information sharing with the FHFA, registered some frustration with an inability to consistently track data points related to language preference and race when it studied pandemic response metrics from 16 large servicers last year.

"Servicers' collection, categorization, and management of information about borrowers who have limited English proficiency and of information related to consumers' race varied widely. As a result, the CFPB could not evaluate the impact of the CARES Act's home mortgage loan forbearance provisions on these two groups," the bureau said in the report.

For reprint and licensing requests for this article, click here.
Servicing Secondary markets
MORE FROM NATIONAL MORTGAGE NEWS