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#2261705 - 10/27/21 06:39 PM Construction Loan - Revise LE Required?
mnbanker09 Offline
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Lender sent a request for closing disclosures to be prepared for a construction loan, and noted that the title company is requesting an additional $20k down in order to receive an early start on their build. Is a revised LE required before issuing a CD? (Is this even a valid changed circumstance?)

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TRID - TILA/RESPA Integrated Disclosures Rule
#2261708 - 10/27/21 07:22 PM Re: Construction Loan - Revise LE Required? mnbanker09
Skittles Online
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Skittles
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TN
The title company is requesting this?
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#2261709 - 10/27/21 07:35 PM Re: Construction Loan - Revise LE Required? Skittles
mnbanker09 Offline
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My initial post should state "early start coverage". The lender's communication does state the Title COmpany is requesting. I'm not familiar with this coverage?
Last edited by mnbanker09; 10/27/21 07:39 PM.
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#2261710 - 10/27/21 07:49 PM Re: Construction Loan - Revise LE Required? mnbanker09
Skittles Online
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I don't know what that means either. I think someone needs to talk to the title company to understand the purpose of this additional $20,000.
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#2261717 - 10/27/21 08:39 PM Re: Construction Loan - Revise LE Required? mnbanker09
rlcarey Online
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rlcarey
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They are going to charge $20,000 to insure against any early start risks? Never heard of that. More information is definitely needed.
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#2261719 - 10/27/21 08:51 PM Re: Construction Loan - Revise LE Required? rlcarey
mnbanker09 Offline
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The lender learned that the borrower started construction early and requested early start coverage from the Title Co. Title responded that the additional funds are needed and will hold in escrow and disburse as needed.

Is a revised LE required??

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#2261730 - 10/27/21 09:36 PM Re: Construction Loan - Revise LE Required? mnbanker09
rlcarey Online
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rlcarey
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Galveston, TX
No - a requirement to establish an escrow reserve account would not be subject to the tolerance tests. Whether you want to issue a courtesy LE because it will substantially increase their cash to close is another questions.
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