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#2193841 - 09/26/18 03:47 PM Collecting Inspection Fees on Construction Loans
Annie Offline
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Joined: Sep 2018
Posts: 27
In a construction loan, at each draw, the lender collects an inspection fee. Thus, the inspection fee is taken from funds set aside for the construction. In this scenario, has the lender collected fees after closing requiring the inspection charges to be disclosed on an addendum; or has the lender collected funds at closing because the money for the charges has been reserved for in the loan amount requiring disclosure on page 2 of the Closing Disclosure as "loan costs?"

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TRID - TILA/RESPA Integrated Disclosures Rule
#2193875 - 09/26/18 06:29 PM Re: Collecting Inspection Fees on Construction Loans Annie
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,346
Cape Cod
The lender has collected fees. Make the disclosures on the addendum page.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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#2193882 - 09/26/18 06:52 PM Re: Collecting Inspection Fees on Construction Loans Annie
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,644
The Swamp
I think you need to look at your accounting practices. I can read your question more than one way.

It sounds like you 'reserved' a specific amount, and if so, when you did your breakouts and ledger tickets, did you go ahead and pull the inspection money into a GL account for that purpose? If so, it's loan costs [this is what we do]

If you only pull the money from the available draw balance as an inspection happens, then it would go on an addendum.
Last edited by RR Joker; 09/26/18 06:52 PM. Reason: typo
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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