Are You Struggling with Construction Loan Compliance Challenges? Technology is the Answer
Now that we are ten years past the housing crash of 2008, we are comfortable saying that the market is on a steady incline. That said, the housing inventory is still not where it was at before 2008. The result is a housing crisis that is more complex than those that came before it.
This means more inventory is needed – which means more construction loans. The problem is that the construction lending industry has some hurdles that it must overcome. One of those hurdles is finding ways to ensure compliance with both federal and state regulations. It would be one thing if these regulations were static, but they are every changing.
The solution to construction loan compliance issues is simple: Technology
The best solution for the issue of changing compliance regulations is upgrading to the latest technology. Regardless of what type of construction loans you offer, whether state or national, or even regional. You will find tools that can help improve your construction loan management process.
As you look for the right solutions, search for technology that helps you throughout the process. You need options that monitor the regulatory agencies and update their information as changes are made both federally and on a state-by-state level. Your goal is to be able to trust that you are in compliance, are making accurate calculations, and are backed by insurance.
TRID is now officially required and mandated
When it comes to federal construction loan compliance, every lender has likely be thinking about TRID lately, which, as of October 1st, is know officially required and regulatory mandated. What’s more, the TRID ruling, which is now three years old, has a 550+ page update as TRID 2.0, which makes it even more difficult to assess and stay in compliance with.
The main changes this amendment brings involve construction one-time close loans. For example, it changes how the cost can be divided between the disclosure for the construction phase and the permanent phase. The finance charges, fees, and points must be calculated on the construction phase if they are not going to be imposed but for the construction financing. This can make the timing, value, inspection, and handling fees more challenging to estimate on the Loan Estimate and Closing Disclosure.
Turn to a company that offers software specifically for construction loans
We strongly suggest that you do not focus on software designed for the real estate industry as a whole. Instead, look for products that are focused specifically on construction loans. Why? Because these regulations are so complex and change so frequently that only a specialized product is likely to be able to keep up.
To learn more about the fund control software offered by ECL Software, and how it can help streamline and simplify your process, contact us at 800-625-5972 or email@example.com. We work exclusively in this space and are ready to help you through this process.