GSEs Delay Closing Disclosure Requirement for Uniform Closing Dataset

June 15, 2017

To address recent industry concerns, Fannie Mae and Freddie Mac announced they would delay by six months the requirement for lenders to embed the Closing Disclosure PDF within the Uniform Closing Dataset XML file.

In an effort to standardize the underlying data required by the new Closing Disclosure, Fannie Mae and Freddie Mac created a UCD, which is a common industry dataset that allows information on the Closing Disclosure to be communicated electronically. Fannie Mae and Freddie Mac have developed the UCD at the direction of the Federal Housing Finance Agency as part of the Uniform Mortgage Data Program (UMDP), an ongoing initiative to enhance loan quality and consistency through uniform loan data standards for the single-family loans the GSEs purchases.

In their announcement, the GSEs reported there are industry challenges requiring the Closing Disclosure PDF to be embedded in the UCD XML file. The previous deadline was September 2017, but as a result of customer feedback, the GSEs will not enforce this requirement until April 2018.

Previously, the GSEs delayed requiring lenders to submit seller Closing Disclosure data until September 2018. The GSEs postponed the seller reporting requirement due to difficulty lenders are having preparing systems for changes to the Home Mortgage Disclosure Act and Uniform Residential Loan Application. In a letter sent by the Mortgage Bankers Association, lenders expressed concerns that most seller data does not originate in their system and efforts to easily integrate that data are not going as smoothly as hoped.

With these new requirements, title agents and lenders should take time now to verify that their respective systems can accept electronic information from the other. Lenders, in particular, will likely demand this capability from settlement providers in order to ensure compliance with the three-day rule. Rekeying of data from one system to the other is not going to be an acceptable practice under the new rules. The UCD is incorporated into many title and settlement software systems, providing ways for users to transmit that data to their lender customers.

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