FHFA Announces Mortgage Servicer Requirements for Maintaining Fair Lending Data

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The FHFA announced that Fannie Mae and Freddie Mac will require mortgage servicers to maintain certain fair lending data elements, including the borrower’s age, race, ethnicity, gender, and preferred language. The fair lending data must be stored in a searchable format, and must transfer with servicing throughout the loan term.

On the topic, Freddie Mac issued Bulletin 2022-17, and Fannie Mae issued Servicing Guide Announcement SVC-2022-06. These issuances specify that that data elements must be maintained and transferred, if obtained during the origination process, for loans originated on or after March 1, 2023. The issuances also note that servicers may, but are not required to, update the data elements in the event of a subsequent transfer of ownership or assumption of the loan.

While the effective date is March 1, 2023, servicers may implement the changes sooner. We note that the Fannie Mae issuance states that servicers are “encouraged to implement these policy changes immediately”.

As previously reported, when the FHFA announced that Fannie Mae and Freddie Mac would require mortgage lenders to request a mortgage applicant’s language preference for applications taken on or after March 1, 2023, the CFPB advised that such a request does not violate the Equal Credit Opportunity Act (ECOA).  It would be helpful if the CFPB addressed the permissibility under ECOA of a Fannie Mae and Freddie Mac requirement that mortgage servicers maintain certain fair lending data elements.  ECOA and Regulation B expressly require that creditors collect certain applicant demographic data in connection with mortgage loan applications to be secured by a primary residence.  ECOA and Regulation B do not expressly address the maintenance of such data by mortgage servicers. 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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