May 12, 2021
Dear Chairwoman Waters and Representative Garcia,
The Americans for Financial Reform (AFR) Language Access Task Force and the undersigned organizations write to express our support for HR 3009, the Improving Language Access in Mortgage Servicing Act of 2021. LEP borrowers face many challenges that impede their full participation in the consumer marketplace, including, specifically, their ability to obtain and preserve ownership of a home. The Improving Language Access in Mortgage Servicing Act will make important strides in improving access to the mortgage market and increasing awareness of the availability of assistance for homeowners who are struggling to keep up with their mortgage payments, which is especially critical during the ongoing COVID-19 pandemic.
In 2017, approximately 25.6 million individuals in the United States were considered limited English proficient (LEP), making up nearly 9% of the total U.S. population. About 64% of the LEP population speaks Spanish, and over 83% of all LEP individuals speak one of the top eight languages. Despite this sizable need and opportunity, the language needs of many current and potential homeowners are left unmet in the mortgage marketplace. Language barriers continue to limit LEP consumers’ access to affordable homeownership opportunities and hinder lenders’ ability to serve this market effectively. LEP individuals need access to information in their preferred language before, during, and after a financial transaction. While marketing may occur in the person’s preferred language, too often the financial transaction documents and any subsequent contact (oral or written) is English-only. The inability of borrowers to speak English at all or well enough to complete a complicated financial transaction has a wider impact on their participation in the housing market because it exposes them to potential abuse and fraud. LEP consumers continue to be denied sufficient access to language services in mortgage origination and servicing. This lack of access is a significant barrier to homeownership and creates an elevated risk of foreclosure among immigrant homeowners.
The first step toward expanding access to homeownership for consumers with limited English proficiency is to create a standardized method to identify their preferred language and have this information travel with their loan file to subsequent servicers. Asking about a consumer’s language preference is a gateway to greater access to services in-language when they are available. It allows lenders and servicers to connect consumers to already-available services, and prompts the industry to expand those services when the data and resources support such an effort. As technology improves and more in-language resources become available, knowing a borrower’s preferred language will allow lenders to easily connect LEP consumers to those resources, which will benefit both the borrower and the lender.
The Improving Language Access in Mortgage Servicing Act’s directive to the Consumer Financial Protection Bureau to create a standardized language preference form for most mortgage transactions, translated into the top LEP languages spoken in the United States, will enable creditors and servicers to better serve LEP consumers across the entire mortgage market. The individual’s language preference will be collected and recorded, and the information will travel as part of the borrower’s loan file throughout the life of the loan, allowing subsequent servicers to connect the borrower to available in-language resources.
More in-language resources are needed to better serve LEP borrowers, and the Improving Language Access in Mortgage Servicing Act facilitates the use of in-language resources after the borrower’s preferred language has been ascertained. First, the bill requires creditors and servicers to provide translated documents if they are available in the borrower’s preferred language, allowing the borrower to understand the details of their transaction. Second, it requires creditors and servicers to provide oral interpretation services if reasonably available, which will provide LEP borrowers with real-time information and the ability to communicate any questions about the loan to the creditor or servicer in their preferred language. In addition, the bill requires creditors and servicers to provide a notice of available language services in a borrower’s preferred language, which will inform borrowers how they can access such services. The Improving Language Access in Mortgage Servicing Act also provides training for housing counseling agencies to expand the availability of housing counseling services for LEP borrowers and making it easier to find this type of assistance and establishes a federal interagency website with translated mortgage resources.
Tracking and transferring the language preference of LEP borrowers and enhancing the availability and use of services and resources in their preferred languages will significantly improve market access for LEP borrowers at all stages of a mortgage loan. We strongly urge you to swiftly pass this bill to allow more LEP borrowers to access affordable homeownership opportunities and the assistance they need to maintain long-term homeownership.