Rules for disclosures about mortgage loans at zero percent interest made by charities such as Habitat for Humanity and others would be rewritten by the federal consumer financial protection agency under legislation approved by the House Tuesday.
The Building Up Independent Lives and Dreams (BUILD) Act (H.R. 5953), authored by Reps. Barry Loudermilk (R-Ga.) and Brad Sherman (D-Calif.) and passed by voice vote, requires the Bureau of Consumer Financial Protection (BCFP, formerly known as the CFPB) to allow “bona fide nonprofits” eligible for tax-exempt charitable donations that are making zero-interest mortgage loans to choose whether to use the truth in lending (TIL), good faith estimate (GFE), and HUD-1 forms instead of the more complicated TRID forms.
The proposal would require the BCFP to rewrite, within 180 days of enactment of the legislation, its rules for disclosures of the zero percent interest mortgage loans made by the charitable organizations, which are now covered by the bureau’s TILA-RESPA integrated disclosure (TRID) forms.
According to the bill’s authors, all organizations now making five or fewer mortgage loans in a year would not be required to use the TRID forms and could instead use the TIL, GFE, HUD-1 forms to ensure the material terms and costs of the loans are communicated to the borrower. “This bill simply extends this option to all local Habitat organizations regardless of how many mortgage loans they are making per year,” a fact sheet on the legislation states.