House Committee Passes Bill Exempting Charities from TRID

July 10, 2018

The House Financial Services Committee recently approved a bill that would exempt charitable organizations from using the Loan Estimate and Closing Disclosure required under the TILA-RESPA Integrated Disclosures (TRID) rule.

Introduced by Rep. Barry Loudermilk (R-Ga.), the Building Up Independent Lives and Dreams (BUILD) Act would roll back TRID requirements and allow charities that originate 0% interest rate mortgages to use the Good Faith Estimate, Truth-In-Lending and HUD-1 forms.

The committee passed the bill by a vote of 53-0. The full House was expected to consider the bill on July 10. Rep. Brad Sherman (D-Calif.) has co-sponsored the bill.

"In Georgia, Habitat for Humanity has experienced challenges with some mortgage disclosure regulations under Dodd-Frank," Loudermilk said in a press release. "My bill aims to cut some of the red tape and alleviate unnecessary burdens brought on by Dodd-Frank regulations. This legislation will allow nonprofits, such as Habitat for Humanity, to choose to be exempt from the overly complicated mortgage disclosure requirements of Dodd-Frank, and replace them with a more simplified system."

While TRID applies to most closed-end consumer mortgages, it does not apply to:

  • Home-equity lines of credit
  • Reverse mortgages
  • Mortgages secured by a mobile home or dwelling not attached to land
  • No-interest second mortgage made for down payment assistance, energy efficiency or foreclosure avoidance
  • Loans made by a creditor who makes five or fewer mortgages in a year

Federal law does not require the use of the HUD-1 or the Closing Disclosure in all-cash transactions. While some states have laws requiring the use of a state promulgated form in cash transactions, in general the HUD-1, the Closing Disclosure or any other settlement statement can be used in cash transactions. In addition, federally related mortgage loans generally exclude temporary financing and construction loans.


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