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Good Afternoon,
We are currently unable to do construction to permanent loans due to system limitations with implementing TRID. Until then we are doing 2 step construction loans. I understand that we are able to handle the disclosures in a few different ways (use 1 application provide 2 LE’s within 3 days or 2 applications and provide LE’s within 3 days of receiving each application).
My question is if we anticipate offering the permanent financing portion of the construction loan to the applicant are we able to request an updated application at the end of the construction period and at that point give them the permanent financing LE -or- since we will likely (unless the borrower goes somewhere else to finance the permanent phase) do the permanent phase are we required to issue both the construction & permanent LE’s within 3 days of application since we anticipate doing both phases and will evaluate the borrower for both phases?
Thank you for your input
As you mentioned, you must provide the LE within 3 business days of receiving the application. If you have an application for only a the construction loan then you would provide LE for the construction phase. In such case, since you don’t have an app for the permanent phase until the construction phase is complete, you would issue the permanent phase LE within 3 business days of receiving the app for the permanent phase (at the end of the construction phase).
If you have an application for both the construction phase and the permanent phase on the same app you must provide LE for both within 3 business days of receiving that application.
What are your thoughts on this. Since we may do the permanent financing and if we could we would be offering an all in one loan but can’t right now (so the intent is to try to get the business for the perm phase). Wouldn’t you think we “relied” on the application to some extent for the permanent phase even though we will get updated information down the road? I just don’t know how we would defend not providing the applicants with a LE for the permanent phase when we know we will likely be offering it to them at some point (we don’t offer it at the time of the construction loan necessarily).
Thanks for your input, it is greatly appreciated!
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