Construction Loan Disbursing Service for Lenders

For complete information about Construction Disbursing procedures and pricing, please contact us at (303) 636-2761.

The Features & Benefits:

Our Construction Disbursing department is staffed by experienced professionals that will serve to process each draw request quickly and efficiently. This saves the Lender time that can be used in attending to other business matters.
We keep an accurate accounting of funds that we disburse from the construction loan, so that you can easily manage your customer’s account and stay in compliance with the loan covenants.
Inspection reports may be produced, at the request and for the benefit of the lender, to approximate the stage of construction with each draw request.which will assist the lender to gauge a balance between the progress of construction completed on the project and the amount of funds disbursed at the time of the draw request.
Lien waivers are collected from each subcontractor throughout each draw process for which payment was made with funds that we’ll disburse from the construction loan. This protects the lender from the potential that a mechanic’s or materialmen’s lien may be recorded and adversely impact title to the subject property.
We will insure the Lender against any mechanic’s lien that is recorded for which payment was made with funds disbursed by Land Title and we will work with the Lender to secure proper settlement of any mechanic’s lien that is recorded during the course of construction to ensure that the Lender’s lien position is always protected.
We charge a one-time fee for our Construction Loan Disbursing service that includes disbursement processing, inspection report, title search, lien waivers, escrow accounting, check registers and, at the request of the lender, the date down and mechanic’s lien endorsements. A single fee prevents additional charges that mount up if the construction schedule gets prolonged for any reason.
At the conclusion of each draw request we can provide endorsements to the lender’s policy as written confirmation to the Lender that the title search of the property was clear of recorded mechanic’s liens at the time of the most recent draw request and that the Lender is further protected against future mechanic’s and materialmen’s liens to the extent that such liens arise because of work and labor performed or materials furnished with construction loans funds disbursed by Land Title.

The Process:

The Borrowers of the construction loan and any Guarantors will execute Land Title’s Borrower Indemnity Agreement at closing. The General Contractor may also be required to execute Land Title’s Contractor Indemnity Agreement.
The General Contractor submits a draw request to Land Title along with the owner’s approval and signature. We’ll provide the General Contractor with a draw request form or they can use an AIA G-702 and G-703 form or their own form is acceptable if they include the names and addresses of each payee and the amount that they’re to be paid. All invoices must be included in the draw request as supporting documentation of the funds to be disbursed.
When requested, Land Title conducts the property inspection and prepares a construction progress report to depict the work completed and materials in place and estimates the stage of construction progress. The report is supplemented with digital photographs.
A title search is conducted to discover the existence of any mechanic’s liens that may have been recorded since the time of the last draw request.
The draw request and letter to request advance of funds from the construction loan is forwarded to the Lender along with the property progress report and notification of recorded mechanic’s liens, if any.
While the draw request is pending Lender approval, our construction disbursing department will be working behind the scenes to prepare checks to be cut, obtain W-9 from vendors to be paid and organize the check register so that checks can be issued as soon as funds are deposited into Land Title’s construction loan disbursing account.
The checks are delivered directly to the contractors, subcontractors, suppliers and vendors as directed.
Our disbursement checks have a lien waiver emblazoned on the face of each check that indicates the amount of payment, the name of the property owner and the property address for which the lien waiver is being executed. The check stub is utilized to describe the invoice number or detail of work for which payment is being made. The contractor must execute the lien waiver in order to deposit the check into his bank account.
At the conclusion of each draw request, we’ll deliver the mechanic’s lien and/or date-down endorsement to the Lender which reflects the amount of the construction loan funds that have been disbursed by Land Title to date.
We can produce and provide at any point in the construction process a detailed check register of payments made to all payees or all payments made to an individual payee.

The Pricing

The price for our construction disbursing services is determined by the amount of the loan to be disbursed and by the type of mechanic’s lien coverage being provided, if any. Generally, our fee is $750 to disburse construction loans of $500,000 or less. For disbursement of loans over $500,000.00, the fee is $750.00 plus 75 cents per $1000 of liability above $500,000.00. Please contact our construction disbursing department at (303) 636-2761 for a detailed quote.