Building Up Independent Lives and Dreams Act

Floor Speech

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Mr. LOUDERMILK. Mr. Speaker, I thank my colleague and the gentleman from Michigan (Mr. Huizenga) for yielding time for me to speak on what I think is a very important bill.

Mr. Speaker, I rise today in strong support of this bill, the bill which is entitled Building Up Independent Lives and Dreams Act, also better known as the BUILD Act. This bill is proof that, even in this Chamber, we can rise above politics and let common sense prevail occasionally.

I would like to first start by thanking my colleagues on both sides of the aisle who have worked with me and my staff to make this a very strong, bipartisan effort. I appreciate my colleague Mr. Sherman, who just spoke, for negotiating reasonable changes to the bill and for being an original cosponsor. I also want to thank Ms. Tenney, Ms. Velazquez, and Mr. Budd for their work and for cosponsoring the bill as well.

Mr. Speaker, the Dodd-Frank Act required the Consumer Financial Protection Bureau to combine the TILA loan estimate and the RESPA closing disclosure forms into one integrated form, which, as you have heard, is called the TRID.

While the TRID forms were well intended to help ensure that home buyers receive essential information about the costs and terms of their home loan, the TRID rule has some unintended consequences on nonprofit organizations such as Habitat for Humanity.

The TRID rule is a whopping 1,888 pages long and is very complicated. The forms include sections on balloon loans and adjustable-rate mortgages, things that may be relevant to traditional mortgage lenders but are not applicable to nonprofits that solely offer low-cost housing to needy families. The complex and complicated TRID forms cause confusion to Habitat home buyers, staff, and their volunteers.

Besides the complexity, the TRID disclosures require software for lenders to be able to fill them out, which has been too costly for many local Habitat organizations. The vast majority of the more than 1,200 local Habitat affiliates nationwide are small, community-based organizations with very small mortgage portfolios and few, if any, full-time staff.

These organizations have experienced challenges with the cost and complexity of these new mortgage disclosure forms. To address these problems, the BUILD Act relieves charities from the costs and the complexity of the TRID rule but ensures that the terms of these mortgage loans are disclosed.

Currently, all mortgage lenders making five or fewer loans a year are exempt from TRID and, instead, use the same mortgage disclosure forms that were in place before Dodd-Frank. The BUILD Act simply extends this exemption to nonprofits which are eligible for tax-exempt charitable donations and are making zero interest mortgage loans, regardless of how many mortgage loans they are making per year.

The BUILD Act will allow local Habitat organizations to choose whether to use the previous, simplified reporting or the more complex TRID reporting. The BUILD Act is supported by Habitat for Humanity International and the National Housing Conference.

In closing, I want to reiterate that the purpose of this bill is to help nonprofits spend more time fulfilling their mission of providing low-cost housing to needy families and less time sitting in an office doing regulatory paperwork. The BUILD Act recognizes that one size does not fit all when it comes to regulating these charities and gives themselves the flexibility to choose which mortgage disclosure forms work best for them.

Mr. Speaker, the BUILD Act passed the Financial Services Committee with a unanimous vote of 53-0. I urge all of my colleagues to support this bill.

Ms. MAXINE WATERS of California.

Mr. Speaker, I want to thank my colleague, Mr. Sherman, for working across the aisle to develop H.R. 5953, the Building Up Independent Lives and Dreams Act, or the BUILD Act, which will assist nonprofits in providing affordable housing to those in need.

Some nonprofit organizations, like Habitat for Humanity, help borrowers who would otherwise not be able to afford a home by offering zero percent interest mortgages with terms that ensure the borrowers have the ability to repay the loans while also taking care of other household expenses. Oftentimes, these nonprofits rely heavily on limited staffs or volunteer labor to underwrite mortgages for families in need.

Because of these unique dynamics, some smaller affiliates of these types of organizations have had a bit of difficulty adapting to the current updated disclosure forms that are used to inform mortgage borrowers about the material terms and costs of their loans. This bill would give those nonprofits the flexibility to choose whether to use truth-in-lending, good-faith estimate, and HUD-1 mortgage disclosure forms when originating a mortgage or the TILA-RESPA integrated disclosure, or TRID, forms.

Even though this very narrow exemption already applies to organizations that make five or fewer mortgages annually, I believe we are all in agreement that extending this flexibility to charitable nonprofits with a unique business model like Habitat is a positive change.

Nonprofits like Habitat for Humanity operate with different business models and traditional financing institutions. They are and they serve a different clientele. It is clear that the BUILD Act does not provide any opportunity for other types of lenders to take advantage of the carve-out in a way that could potentially harm borrowers. With that in mind, I support this bill, and I encourage my colleagues to do the same.

Mr. Speaker, I have no more requests for time, and I yield back the balance of my time.

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