We recently had an external compliance audit and they cited us for not including construction funds ( amount available for future draws towards construction) in the payoff section of the Loan Estimate and the Closing Disclosure. We have always shown those funds in the Cash to Close section of the forms. Should we be including those funds in the total payments and payoff section of the forms? We just want clarification before we change our methods.
We are not quite clear on your question. You state the examiners want the construction funds in the “payoff” section of the LE and CD. There is a “payoff and payments” section in the optional alternative cash to close section. Please clarify the “payoff” section.
The construction costs are disclosed differently on the LE and the CD, and are disclosed differently in the regular cash to close transaction or in the optional alternative cash to close.