News & Analysis as of

Construction Loans

Keeping Your Place in Line: Title Insurance Protections for Construction Loan Disbursements

Most construction loans contemplate multiple advances or disbursements of funds at various stages of the construction project. The construction loan agreement will set forth the conditions that the borrower must satisfy to...more

Congress Introduces Bill to Clarify HVCRE Loans

by Sullivan & Worcester on

Eric D. Lemont wrote the article, "Congress Introduces Bill to Clarify HVCRE Loans," which discusses proposed amendments to the Federal Deposit Insurance Act. Specifically, Mr. Lemont describes how the proposed legislation...more

Equitable Subrogation Part Deux: Mechanic’s Lien vs. Later Bank Deed of Trust

by Snell & Wilmer on

This post follows, almost two years to the day, Rick Erickson’s post of August 29, 2014. As noted by Rick Erickson in his August 29, 2014 post, the Arizona Supreme Court in the Weitz case (2014) had determined that equitable...more

Vesting and Priorities of Competing Construction Liens

It goes without saying that a construction project involves a plethora of competing interests. There is a lender, a main contractor, subdivision improvers, architects, and many different subcontractors, all of which are...more

How to Balance Lender and Contractor Interests on Alternative Energy Construction Projects

by Faegre Baker Daniels on

Lenders who finance wind and solar farms often require the EPC contractor to consent to the developer’s assignment of the EPC Contract to the lender to secure the developer’s obligations under the loan documents. Such...more

Construction Financing and Mechanics’ Liens in Connecticut

by Murtha Cullina on

Bankers and other professionals who have worked on construction loans in states other than Connecticut will know how much of a pain it can be to make construction loan advances. You usually need to perform a title update and...more

CFPB Posts Latest TRID Webinar

by Ballard Spahr LLP on

The CFPB updated its regulatory implementation materials to incorporate the recording of its March 1st presentation titled Know Before You Owe Mortgage Disclosure Rule – Construction Lending. The presentation focused on...more

CFPB Staff Presents TRID Rule Webinar

by Ballard Spahr LLP on

The Consumer Financial Protection Bureau (CFPB) staff presented an informational webinar on March 1, 2016, to address several issues with the TILA/RESPA Integrated Disclosure (TRID) rule in connection with...more

Recent Arizona Case Law and Legislative Developments Affecting Real Estate Lending

The following information accompany a presentation Mike gave to members of the Arizona Commercial Mortgage Lenders Association (ACMLA) on March 8, 2016. A summary of legislative amendments enacted during the most recent...more

Perspectives - February 2016

by Benesch on

I Just Received Drafts of Construction Loan Documents from My Lender, Now What? I have heard the following statement many, many times over the course of my career: “Do I really need to hire an attorney to close a simple...more

Do Treble Damages Mean Treble Rescission?

by Ellis & Winters LLP on

North Carolina law awards treble damages for violations of N.C. Gen. Stat. § 75-1.1 “if damages are assessed.” A recent Fourth Circuit decision asks this question: If a plaintiff seeks rescission, and if the defendant’s...more

Stop Notices and Mechanic's Liens: Construction Lenders' Nightmares

by Buchalter on

Historically low interest rates have led to the substantial growth in real estate lending, especially construction lending. Unfortunately, the lead article in the Business Section of the January 28, 2016, issue of the Los...more

CFPB Construction Loan "Fact Sheet" Falls Far Short of Necessary Guidance

by Ballard Spahr LLP on

The Consumer Financial Protection Bureau (CFPB) has issued a "fact sheet" regarding the disclosure of construction-to-permanent loans under the TILA/RESPA Integrated Disclosure (TRID) rule, which the CFPB refers to as the...more

CFPB Releases Guidance on Construction Loan Disclosures

by BakerHostetler on

On January 12, the CFPB released a Construction Loans Fact Sheet reviewing the basics of construction loan disclosures under the TILA/RESPA Integrated Disclosure (“TRID”) Rule. This resource briefly summarizes the TRID...more

CFPB construction loan “fact sheet” falls far short of necessary guidance

by Ballard Spahr LLP on

The CFPB has issued what it calls a “fact sheet” regarding the disclosure of construction-to-permanent loans under the TILA/RESPA Integrated Disclosure (TRID) rule, which the CFPB refers to as the Know Before You Owe rule....more

Guarantors’ “Lost Profits” Completely Offset Lender’s Deficiency Claim

by Snell & Wilmer on

Believe it or not, lenders can breach loan agreements too…and when they do, there can be significant consequences. In Great Western Bank v. LJC Dev., LLC, 726 Ariz. Adv. Rep. 21 (Ariz. Ct. App. Nov. 10, 2015), the Court of...more

Partial Subordination Agreement not Involving or Affecting Mechanics Lien Claimant Priority is Enforceable in Nevada

by Snell & Wilmer on

When visible construction begins, Nevada law says mechanic’s liens attach to the construction site. A construction lender wants to ensure that its deed of trust securing the construction loan has first priority to the...more

A Brief Look At Common Construction Loan Credit Enhancements

by Poyner Spruill LLP on

As the competition for construction loan projects remains at unprecedented levels in much of the country, lenders are frequently being asked to waive, modify or re-visit their standard construction loan credit enhancement...more

Playing Hot Potato: Indemnity Strikes Again

Indemnity can be like playing hot potato (for those of you closer to the Minecraft generation, in the game of hot potato, a metaphoric “hot potato” is tossed between (ahem amongst) players while music is playing, and when the...more

Title Insurance: When Does a Construction Lender “Create” or “Suffer” a Mechanics Lien?

by Pepper Hamilton LLP on

BB Syndication Services, Inc. v. First American Title Ins. Co., 785 F.3d 825 (7th Cir. 2015) – A construction lender sued a title insurance company seeking defense and indemnification in connection with claims in a...more

Coming Soon... New Closing (no, Consummation...) Rules!

by Barley Snyder on

What?! We can’t call it a closing anymore? Under new federal regulations regarding the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”), the terminology for a “closing” or “settlement” is...more

Obtaining Title Insurance on Construction Loans: Avoiding Pitfalls Regarding Title Insurance Underwriting for Construction Loans

Avoiding Pitfalls in Construction Mortgages: Top 5 Tips for Title Insurance Underwriting - Construction mortgages pose significant risks for title insurers and require specific underwriting analysis. Avoid the...more

Seventh Circuit Limits Construction Lender’s Use of Title Insurance Policy to Cover Construction Liens Created by Lender’s Cutoff...

by Foley & Lardner LLP on

In a recent decision written by Judge Sykes, affirming a decision from the Western District of Wisconsin, in an issue governed by Wisconsin law, the Seventh Circuit ruled that a title insurer has no duty to indemnify a...more

Whom the Gods Would Destroy, They First Make Meet A Higher Regulatory Capital Burden

by Dechert LLP on

Or perhaps Prometheus had it right in its original form. “Whom the Gods would destroy they first make mad.” Look at what we are doing to construction lending in the name of our seemingly endless safety and soundness...more

Construction Contract Claims Against a Third-Party Lender? The Unforeseen Consequences of a Standard Practice

For those of us who commonly represent lenders, there is nothing more unsettling than hearing the words “course and pattern of conduct” or “dominion and control” or some variation of the same. Any suit where someone seeks to...more

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