Skip to content
BOL Conferences
Page 2 of 2 1 2
Thread Options
#2122048 - 03/15/17 03:14 PM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
It would be a matter of your loan contract. Why would you not just apply the fee to the loan rather than trying to collect separately? Consult your legal counsel.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
TRID - TILA/RESPA Integrated Disclosures Rule
#2127093 - 04/19/17 08:07 PM Re: Loan Estimate - Construction Inspection Fees awilli
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
Similar issue - we have a third party provider perform our inspections and they charge a fee per inspection. We do not collect these fees up front - either the customer pays per draw or we advance enough to cover these fees at the time of inspection. Since we do not know how many there will be and don't charge the customer at loan origination, are these fees required to be on the LE/CD - or just added in the loan agreement?

Thanks!
_________________________
My Opinions Only

Return to Top
#2127132 - 04/19/17 09:30 PM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Right now - in the loan agreement. In the future - depends on how the new construction inspection fee disclosures under the amendments to the TRID regulations turn out.

Either way, they have to be estimated and included in the finance charge for APR calculation purposes.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2127192 - 04/20/17 12:11 PM Re: Loan Estimate - Construction Inspection Fees awilli
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
Thank you, Randy. That's what we (the compliance group) thought, but obviously we're getting push back.
_________________________
My Opinions Only

Return to Top
#2127245 - 04/20/17 03:14 PM Re: Loan Estimate - Construction Inspection Fees awilli
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
OK - tacking another question onto this thread. For those of you that are not collecting any future inspection fees at the time of loan origination, how are you including the cost in the APR while not showing this fee on the LE/CD?
_________________________
My Opinions Only

Return to Top
#2139516 - 07/25/17 11:02 PM Re: Loan Estimate - Construction Inspection Fees awilli
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,601
Ohio
We have a non-TRID loan that the borrower is taking their time completing their rehab to the property. We generally have a six draw schedule but this borrower has already exceeded that (he calls in, we go out an inspection the property and give him the funds for what he's completed). The loan officer is asking if we are allowed to start charging him for future inspections. We do not have anything about excessive inspections into our loan agreement so I don't think we can charge him. Can we have him sign an addendum to the construction agreement and charge the additional fees?

Return to Top
#2139519 - 07/26/17 12:13 AM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
You are asking a legal question.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2155838 - 12/03/17 10:33 PM Re: Loan Estimate - Construction Inspection Fees awilli
JC (Darth HMDA) Offline
Diamond Poster
JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
Hello,

We are rolling out Construction Loans (Const-Perm) - If the company providing the inspections is not known at the time the CD is provided, who do we list as the Payee in Section B? (or what do we put?)

Any help would be appreciated. Very informative thread (Thank you Randy and Others).
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

Return to Top
#2155840 - 12/04/17 01:27 AM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Section A as payable to the bank. It is not payable to a third party at consummation. The fact that the bank may at a later time select a third party to perform the inspections is a subsequent event.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2155870 - 12/04/17 03:58 PM Re: Loan Estimate - Construction Inspection Fees awilli
JC (Darth HMDA) Offline
Diamond Poster
JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
Thank you as always for the advice Randy!
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

Return to Top
#2161941 - 01/25/18 09:41 PM Re: Loan Estimate - Construction Inspection Fees rlcarey
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,668
Thanks![/quote]
Originally Posted By rlcarey
Right now - in the loan agreement. In the future - depends on how the new construction inspection fee disclosures under the amendments to the TRID regulations turn out.

Either way, they have to be estimated and included in the finance charge for APR calculation purposes.


How did this turn out with the amendments?

Return to Top
#2161942 - 01/25/18 09:43 PM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
3. Construction loan inspection and handling fees. Inspection and handling fees for the staged disbursement of construction loan proceeds, including draw fees, are loan costs associated with the transaction for purposes of § 1026.37(f). If inspection and handling fees are collected at or before consummation, the total of such fees is disclosed in the loan costs table. If inspection and handling fees will be collected after consummation, the total of such fees is disclosed in a separate addendum and the fees are not counted for purposes of the calculating cash to close table. See comment 37(f)(6)-3 for a description of an addendum used to disclose inspection and handling fees that will be collected after consummation. See also comments 38(f)-2 and app. D-7.vii. If the number of inspections and disbursements is not known at the time the disclosures are provided, the creditor discloses the fees that will be collected based on the best information reasonably available to the creditor at the time the disclosure is provided. See comment 19(e)(1)(i)-1. See § 1026.17(e) and its commentary for an explanation of the effect of subsequent events that cause inaccuracies in disclosures.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2172263 - 04/06/18 02:24 PM Re: Loan Estimate - Construction Inspection Fees awilli
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,668
So, the above is mandatory in October, but for now it depends on if you have switched over to TRID 2.0 or not, right? Either way, I am assuming the APR calculation requirement is the same. If you don't know the amount of the fee, then how do you include it in the APR calculation? Just use the good faith estimate standard pretty much, yes?

Return to Top
#2172313 - 04/06/18 04:01 PM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Yes and Yes
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2172419 - 04/06/18 08:48 PM Re: Loan Estimate - Construction Inspection Fees awilli
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,668
Thank you for the confirmation.

Return to Top
#2181762 - 06/14/18 01:43 PM Re: Loan Estimate - Construction Inspection Fees awilli
c@c Offline
100 Club
Joined: Mar 2008
Posts: 120
Georgia
A follow-up question to this thread. I understand that if we disclose 5 inspections but end up doing 7, our loan contract governs whether or not we can pass that additional charge along to the borrower. Would the same be true if we disclosed 5 inspection fees @$100 each but the actual cost turned out to be $150 per inspection instead since we are dealing with a zero tolerance item?

Return to Top
#2181766 - 06/14/18 02:04 PM Re: Loan Estimate - Construction Inspection Fees awilli
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
It will all depend on a good faith assessment. Was the estimate in good faith at the time it was made. If it was, then you ae good - any change after the fact would be a subsequent event.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
Page 2 of 2 1 2