Construction Loan Disbursement
Draws and Mechanic's Lien Protection Services

Ensure your draws are processed accurately, efficiently and professionally with our expert construction disbursement team.

Endorsements

101 Endorsement

Full-Service Features

The 101 Endorsement is a service Land Title provides that handles the draw requests, inspections, provides lien waiver protection to the lender, and title updates with each draw. Land Title directly cuts the check to the subcontractors and suppliers according to the draw requests from the general contractor and borrower. Each submission must be approved by the lender.

The Process
What to expect...

The first step is to complete the Construction Loan Draw Request Affidavit (CLDRA) and Request for Funds form, and include invoices listing who will be paid. Land Title is required to process these checks exactly as they appear in the form and affidavit. Once Land Title receives the draw request, a field inspection will be scheduled to confirm the work has been completed within two business days of receiving the request.

Next, Land Title will send the inspection to the lender for their approval to process the draw within three business days. Once the draw has been completed, Land Title will provide a check register listing all checks by number, persons, and amount to be paid. The entire process from submitting the draw request to supplying the check register is five business days.

Required tax forms and numbers

  • Tax ID numbers
  • IRS W-9 form
Fees and Requirements
Cost breakdown...

Fees
The 101 Endorsement is $1,700 up to a $500,000 loan, increasing $1.00 per $1,000 with no limit.
Ex: An $800,000 loan amount - $1,700 + $300 [$800,000 - $500,000 = $300,000/.001] = $2,000 fee

Requirements
  • As-proposed appraisal
  • Construction budget
  • Borrower Financials (1003)
  • Builder contact information with email address

ALTA 32/33 Endorsement

Direct Payment

The American Land Title Association (ALTA) 32/22 Endorsement is similar to the 101 Endorsement except the general contractor will handle the fund disbursement. The general contractor would receive one large amount to disburse to subcontractors and suppliers, while also providing lien waivers for those disbursements before the next draw request. Underwriter approval is required for the ALTA 32/33 Endorsement, and is determined on a case by case basis.

The Process
What to expect...

The lender will require a specific form to be signed for fund disbursement. These forms are accepted by Land Title if they include the amount of the reimbursement and signatured from the borrower, lender, and general contractor. Land Title will require invoices and unconditional lien waivers from each of the subcontractors and suppliers. For the first draw, requests will be submitted via email to draws@ltgc.com, outlining the amount requested and invoices paid.

For Land Title to disburse funds for the second draw, we will need all unconditional lien waivers matching the invoices from the first draw. This process will repeat for each draw request in that Land Title will need all unconditional lien waivers matching invoices from the previous draw. An unconditional lien waiver is required for every check written.

Required tax forms and numbers

  • Tax ID numbers
  • IRS W-9 form
Fees and Requirements
Cost breakdown...

Fees
The ALTA 32/33 Endorsement fee is $1,700 up to a $500,000 loan, increasing $1.00 per $1,000 with no limit (similarly to the 101 Endorsement).

Requirements
  • As-proposed appraisal
  • Construction budget
  • Borrower Financials (1003)
  • Builder contact information with email address

101.5 Endorsement

Mechanic’s Lien Protection

The 101.5 Endorsement provides mechanic’s lien protection for construction work completed before the loan’s closing. This coverage is generally allowed up to the foundation installation stage of a project, or 15-20% of the total budget. The 101.5 Endorsement is always determined on a case by case basis.

Fees and Requirements
Cost breakdown...

Fees
The 101.5 Endorsement fee is 20% of the basic rate with a $200 minimum.

Requirements
  • Scope of work letter outlining the work that's been completed
  • Copies of paid invoices
  • Copies of lien waivers matching paid invoices

122 Endorsement

Available With and Without Disbursing

The 122 Endorsement provides lenders with only title updates in cases where the lender oversees all of the disbursing, including inspections. No lien protection is offered through the 122 Endorsement. With the addition of disbursing, the 122 Endorsement includes title updates, inspections, and fund disbursement on behalf of the lender. Checks can be cut with more flexibility because there’s no mechanic’s lien protection.

Fees and Requirements
Cost breakdown...

Fees
The 122 Endorsement fee is a $1,150 one-time flat fee

No requirements

FAQ

Questions About the Process
I would prefer to write and disburse funds directly to subcontractors and suppliers. Can Land Title reimburse me for those funds?

Yes this is possible, however this request is typically changing the endorsement that's been approved through the closing. This request is reviewed on a case by case basis, and will need to be approved by the lender, Land Title's underwriters, and will require an indemnity agreement signed by the general contractor stating they are willing to help Land Title if a lien were to show up on the property.

The general contractor would need to provide all paid invoices, checks, and lien waivers before Land Title can issue the reimbursement.

Do I need to use Land Title's draw request forms or can I use my own?

The only form Land Title requires exactly as provided is the affidavit form. The draw request form - or specific list of checks - can be a similar form of your choosing.

The general contractor's and borrower's signatures are still required.

How does Land Title disburse checks?

Land Title cuts checks according to the draw request form with paper checks. These checks have lien waivers on them and can't be deposited unless the lien waiver is signed.

General contractors and subcontractors can receive their checks via mail or in-person at certain Land Title offices throughout Colorado. It's preferred that Land Title sends all checks directly to the person the check is made out to because Land Title writes and records the checks.

Why does Land Title send inspectors, and who are they?

Land Title sends independent inspectors on the lender's behalf to ensure the draw request matches the completed work. These inspectors are local professionals who have been screened and hired by Land Title.

Land Title only shares the inspection reports with the lender.

Contact information

Phone: 303-850-4163
Email: draws@ltgc.com
Hours of operation:
Monday – Friday
8 am – 5 pm