The new Integrated Disclosure rules became effective October 3, 2015, and many lenders are scrambling to master the details. Many construction loans were exempt from the old disclosure requirements, but construction loans are covered and significantly impacted by the new rules. Virtually no details are available for construction loans.
The CFPB provided few details regarding completion of the Loan Estimate and Closing Disclosures for these loans. The regulation doesn't contain sample forms for construction loans. The Commentary only mentions construction loans a few times, and those references provide little guidance for completing the forms.
Creditors continue to report problems producing construction loan disclosures using loan origination software (LOS) products. Apparently some LOS products can't produce construction disclosures, while others produce disclosures for some construction loan options, but not others.
Lenders need solutions. Without details, how do you complete disclosures or check disclosures produced by your LOS? How do you determine what construction loan options to offer your customers? It doesn't appear likely the CFPB will provide needed guidance in the coming months.
This webinar is designed to fill the void from the lack of regulatory guidance for construction loans. We'll explain coverage and exemption rules, provide section-by-section guidance on completing the Loan Estimate and the Closing Disclosure for common construction loan options, and answer the many questions you have regarding proper disclosure of construction loans.
- When and why construction loans are covered by the new integrated disclosure rules
- How to complete the Loan Estimate and Closing Disclosure for:
- Construction only loans
- Combined construction/permanent loans
- Permanent financing that replaces construction financing
- How to estimate interest on a construction loan
- Impact of a construction only loan versus a lot purchase/construction loan
- When to disclose "Sales Price," "Estimated Value" or "Appraised Value"
- How to determine the "Purpose" of the loan
- How to describe the "Product"
- Proper disclosure of projected payments
- How to disclose inspection fees
- How to disclose undisbursed construction funds
- Completing the "Cash to Close," Optional Alternate Cash to Close" and the "Cash to Close" in the Borrower's Summary of the Closing Disclosure
- When the AP Table is needed and how to complete it
- How to complete the "In 5 years" disclosure for short-term construction loans
- When to include the "60 days prior to consummation" disclosure
- And much more
Who Should Attend?
Everyone involved in construction loans and construction loan products, compliance staff, and auditors
"The speakers were very knowledgeable on the topic discussed and did a great job clearing some of the ambiguity on the topic." -- Georgina F., Algonquin State Bank
"Great information and very helpful reference material. Content assisted us in making some strategic loan product decisions. Thank you." -- Cindy T., Clatsop Community Bank
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