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Uniform Residential Loan Application Definition
Uniform Residential Loan Application is a standardized loan form used in the mortgage industry. This form is called a 1003 form, it requires that borrowers fill out all necessary information before a loan can be established between a lender and the borrower. Many mortgage lenders in the United States use the 1003 mortgage application form, although some lenders use alternative forms. The 1003 mortgage application form requires basic information from mortgage borrowers, this form must be completed all mortgage borrowers. The basic borrower information required are borrower’s identity (personal information), monthly income, property type and value, household expenses, details of transaction, among others.
A Little More on What is the Uniform Residential Loan Application
The information required on the 1003 mortgage application form assist mortgage lenders in determining whether mortgage borrowers (applicants) are eligible or not. Basically, mortgage borrowers are required to complete the 1003 form twice, one at the initial application and the other at the closing of the application.
The reason mortgage lenders issue the 1003 form twice is to remove any doubts or controversies that borrowers might have regarding the terms of the Uniform Residential Loan Application. It is vital that mortgage borrowers understand all the terms on the 1003 form while completing it. Borrowers can either fill the 1003 form in person or mortgage lenders help them fill it out after all the details must have been sent by the borrowers.
The 1003 loan application form is also called a Fannie Mae Form 1003, it was developed by the Federal National Mortgage Association, or Fannie Mae. The Congress of the United States created Fannie and Freddie Mac (Federal Home Loan Mortgage Corp) to maintain high volume of business interactions in the mortgage market. These two entities dictate the information that are needed in mortgage transactions.
The 1003 is a standardized loan form that is rampantly used in the mortgage industry. Other lenders who wish to use alternative forms can use Form 65 which is an equivalent of Form 1003 that was designed by Freddie Mac.
The eligibility of a mortgage borrower is decided once the 1003 form has been completed. The information supplied by applicants in this form helps lenders to the risk potentials of borrowers and whether the risk is worth taking. Also, the eligibility of borrowers is largely associated with how financial secured and reliable they are.
The information required in the 1003 form include a borrower’s asset such as stocks, bonds, investments and checking accounts that mortgage lenders can liquidate to make repayment for loans if the borrower defaults. Other information include, employment history, personal information, total monthly income for borrower’s household, and regular monthly expenses.
References for Uniform Residential Loan Application
Academic Research on Uniform Residential Loan Application
Fannie Mae/Freddie Mac Uniform Mortgage Instruments: The Forgotten Benefit to Homeowners, Forrester, J. P. (2007).Mo. L. Rev., 72, 1077.
Goin’Round in Circles… and Letting the Bad Loans Win: When Subprime Lending Fails Borrowers: The Need for Uniform Broker Regulation, Havard, C. J. (2007). Neb. L. Rev., 86, 737.
Federal Home Loan Mortgage Corporation, Mac, F. (1989).
Borrower and neighborhood racial and income characteristics and financial institution mortgage application screening, Schill, M. H., & Wachter, S. M. (1994). The Journal of Real Estate Finance and Economics, 9(3), 223-239.
Residential‐Mortgage Lending Discrimination and Lender‐Risk‐Compensating Policies, Buist, H., Linneman, P. D., & Megbolugbe, I. F. (1999). Real Estate Economics, 27(4), 695-717.
Industry-wide information systems standardization as collective action: the case of the US residential mortgage industry, Markus, M. L., Steinfield, C. W., & Wigand, R. T. (2006). MIS quarterly, 439-465.
Lending Discrimination: Is the Secondary Market Helping to Make the American Dream a Reality, Schuster, R. K. (2000). Gonz. L. Rev., 36, 153.
The Future of American Real Estate Law: Uniform Foreclosure Laws and Uniform Land Security Interest Act, Randolph Jr, P. A. (1995). Nova L. Rev., 20, 1109.
The role of the primary mortgage market in the development of a successful secondary mortgage market, Lea, M. J. (2000). Inter-American Development Bank.
Your mortgage loan–fairly priced,… or not?, McClatchey, C., & De la Torre, C. (2008). Financial Services Review, 17(4), 237-56.