HVCRE: The Continuing Saga of Lenders
Loan financing is a cornerstone of real estate development. It’s a rare project that has captive capital to finance the entire project, and many investors expect that their contributions will be leveraged with debt financing....more
If you develop or build on real property in Oregon, your progress payments to contractors on future projects will be affected by a new law, effective on March 7, 2024. If you are a construction lender, your borrower may...more
On November 21, the CFPB announced it approved an application from a community banking trade organization to pilot disclosures for construction loans. The application was submitted pursuant to the CFPB’s trial policy programs...more
The CFPB recently approved an application (Application) from the Independent Community Bankers Association (ICBA) for alternative disclosures under the Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA)...more
Construction lenders beware – a recent Arizona Supreme Court decision interpreting Exclusion 3(a) of standard-form title-insurance policies could mean lenders are not insured against a senior mechanics’ lien if the lender’s...more
In BCD Associates., LLC v. Crown Bank, CA No. N15c-11-062 (Super. Ct. Del, May 2, 2022), the trial court found that when a bank pays a contractor directly, it can create a legally binding relationship subject to the terms of...more
After a number of controversial bills proposed from various industry groups over the last few years, the Tennessee construction community came together in 2020 to push through legislation intended to protect members of the...more
They say a picture is worth a thousand words--which may be particularly true when it comes to real estate. In the not so distant future, property owners will be able to utilize Virtual Reality (VR) and Augmented Reality (AR)...more
Legislative activity increased this week as bill introductions continued and committees began to vote on bills. Constitutional Amendment (H140) - Rep. Chuck McGrady (R-Henderson) was joined by fellow lawmakers Rep....more
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
The 7th Circuit has ruled that a lender is not insured by a title company for liens that arise after a construction loan became significantly out of balance and the lender stopped funding. In BB Syndication Services, Inc v....more
Construction loans typically do not get refinanced before a project is completed. A construction loan is short-term in nature and both the lender and its customer expect that they will stay on the project until the project is...more
Atlantic Builders Group, Inc. v. Old Line Bank (In re Prince Frederick Inv., LLC), 516 B.R. 778 (Bankr. D. Md. 2014) – A construction contractor contended that the claim of the debtor’s construction lender should be...more
A recent Arizona Court of Appeals decision highlights a lien priority risk for secured construction lenders when the financed project fails. The problem—known as a “vendee lien”—is most likely to arise when up-front deposits...more