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#2216211 - 06/21/19 03:23 AM Appendix D to Loans to non-construction only loans
Katherine Offline
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Joined: Aug 2017
Posts: 62
Our doc vendor is applying the Appendix D assumptions to loans that are for construction but not solely for construction in figuring out the Projected Payments Table. Apparently, according to their "legal interpretation" the following loans would apply to Appendix D:
1. Purchase loans that also have construction proceeds
2. Refinance loans where a portion of the funds are to refinance an existing lien and funds are also to construct
3. Construction loans where a portion is for construction and the rest are for home equity purposes (such as debt consolidation and would be disbursed at closing)

Having read Appendix D, I do not see where in the regulations that is blessed or based. I do not see such a blessing under 1026.17(c)(6) nor in Appendix D.

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#2216217 - 06/21/19 11:39 AM Re: Appendix D to Loans to non-construction only loans Katherine
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,957
Galveston, TX
If you don't know when all the advances are going to happen, you have to estimate the disclosures. As long as the estimations are considered reasonable and in good faith, then whatever method you use is acceptable, Appendix D or not.
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#2216257 - 06/21/19 05:47 PM Re: Appendix D to Loans to non-construction only loans rlcarey
Katherine Offline
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Joined: Aug 2017
Posts: 62
Hi Randy, but we know we are immediately disbursing the refinance funds since that has to be paid at closing to secure our lien position, same as for purchase transactions. Also, for debt consolidation, those funds are disbursed at closing. So I don't see how we can assume 50% of the loan amount when for example, $400,000 loan amount with $300,000 for refinancing, and $100,000 is for construction. Our vendor is still calculating based off of 1/2 of the loan amount, so assuming $200,000.

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#2216263 - 06/21/19 06:39 PM Re: Appendix D to Loans to non-construction only loans Katherine
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,957
Galveston, TX
I know - but good luck finding a vendor to support that. You are most likely looking at manual calculations.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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