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#185148 - 04/29/04 04:06 PM PMI
SueBL Offline
New Poster
Joined: Apr 2004
Posts: 2
Does anyone else out there put PMI on a construction loan?
I am struggling with how to properly disclose - especially the cancellation notice.

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Lending Compliance
#185149 - 04/29/04 05:48 PM Re: PMI
Beagles22 Offline
Power Poster
Joined: Jan 2004
Posts: 3,626
State of confusion
We never have put PMI on the construction, but am currently wishing we did! We don't because we do the draws and the dollar amount is constantly changing and it is hard to tell a customer they have to pay on the whole loan amount. Now that we have a construction going bad at 95% LTV I wish I had found a way. I don't know how you could disclose on a short term note, because the amortization information would not make sense...I hope that someone knows the answer though so that I can present it to my officers and let them know that we can indeed place PMI on construction financing.
_________________________
Going to church doesn't make you a christian any more that standing in your garage makes you a car.

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#185150 - 04/29/04 09:25 PM Re: PMI
Beagles22 Offline
Power Poster
Joined: Jan 2004
Posts: 3,626
State of confusion
My PMI representative just came in and I asked about this very product. We can get an endorsement on our construction PMI certificates by calling them and telling them we need a construction to permanent endorsement and you pay nothing at that time. If the loan or the construction go bad you can call and activate the certificate and pay the coverage on the entire loan amount for the months that have passed in order to secure coverage. It will probably come out of your pocket unless it was held in escrow but you will then have coverage. I think you have to use the automated systems and get a certificate first by saying it's a purchase and then you call PMI instead of activating the certificate with a closing date and loan number.
_________________________
Going to church doesn't make you a christian any more that standing in your garage makes you a car.

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#185151 - 02/09/05 07:37 PM Re: PMI
Anonymous
Unregistered

At one of the banks I worked at, we did put PMI on construction loans. We based it on the committed loan amount and started the amortization schedule with the expected date of flipping over to P & I payments.

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