Draw request is submitted to Land Title
Land Title will conduct a physical inspection of the property and prepare an inspection report.
Land Title also conducts a title update to search for any mechanic's liens recorded since the last draw request.
Documents are submitted to the lender
If the title search is clear, an Advance of Funds Request letter and the inspection report are sent to the lender.
Approved proceeds are advanced
The lender will send approved funding to Land Title for the draw request.
Funds are disbursed
Land Title disburses the funds according to the draw request and the lender's instructions.
Mechanic's Lien Endorsement is issued
Land Title will issue the Mechanic's Lien Endorsement, or 101 Endorsement, finalizing the draw request process.
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 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
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
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 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
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).
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
The 101.5 Endorsement fee is 20% of the basic rate with a $200 minimum.
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
The 122 Endorsement fee is a $1,150 one-time flat fee
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.
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.
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.
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.
Phone: 303-850-4163
Email: draws@ltgc.com
Hours of operation:
Monday – Friday
8 am – 5 pm
Complete your draw request affidavit with our downloadable document.
Keep track of your draw request information with our downloadable spreadsheet.
Learn more about how title insurance works and why you need it with Land Title's featured article.
Land Title Guarantee Company has the unique ability to issue title insurance policies through four financially sound underwriters.
Learn more about the most common types of endorsements used in a real estate transaction.
Read about the closing process and the checklist of items to bring to your closing.
