Construction Disbursing

Your disbursing company should have a track record of experience in the industry and offer complete disbursing and title services. They should be properly underwritten by a major national title underwriter and should be able to provide references from both lenders and contractors. Please contact us to obtain a list of our references.

The primary purpose for any lending institution to utilize third party disbursing is to receive mechanic lien coverage on its first position to protect the first deed of trust or mortgage – and then help provide for an easy transition to permanent financing.

Mechanic’s liens are legal documents that essentially reserve the rights of the filer to seek unpaid compensation. They are usually filed by contractors, subcontractors, or suppliers that never received payment for work that they performed or materials that they provided on the construction of the subject property.

They are important because they may become a lawsuit commenced by the unpaid lienor to force the sale of the property so that the lien can be satisfied out of the proceeds of the sale.

Mechanic liens may be filed by any unpaid sub-contracted party on a construction project – which can potentially force a foreclosure on the property in question. This includes all three tiers of contractors:
General Contractors
Sub-Contractors
Material suppliers to subcontractors or subs hired by sub-contractors.

They establish the rules of coverage and financial stability. Our underwriter-approved process requires direct payments to all contractors, subcontractors and construction material suppliers and as such provides mechanic lien coverage for all construction projects. Each of our disbursing transactions is backed-up by a construction inspection that details completed work by each construction cost category. All transactions are reviewed to provide loan to value monitoring and mechanic lien risk management.

Our experienced construction disbursing officers continually provide a third-party review of each transaction to enable mechanic lien coverage and protect your deed of trust. Each transaction is available for review 24/7 on our online disbursing software Disbursa.

Loan -to-value means that the amount of the loan disbursed is equal to the value of construction completed.

It is one of the most valuable parts of our NCD services because our procedures only permit payment for invoices for completed work. We only pay for owner approved, completed and invoiced work. Our on-site inspections must verify that those items for which contractors and sub-contractors are invoicing represent completed work.

If work is not complete – or material is not at the jobsite – those items remain unpaid, and loan to value is not compromised. This loan to value monitoring is central to providing mechanic lien coverage that helps protect every deed of trust.

As you or your client’s opportunities for growth increase beyond their metropolitan area our nationwide construction disbursing services can permit your loan committee to approve construction loans for projects far beyond your state or region. Our success in nationwide construction disbursing projects from California to Florida and from Minnesota to Texas helps us understand the unique challenges in protecting your deed of trust while disbursing construction projects away from the lender’s primary lending area.

To meet these challenges our service includes on-site construction inspection services that include a brief narrative of construction organization and progress, pictures of construction progress, and completion percentages by cost category. We provide each of these inspection details to our clients in our proprietary password-protected online disbursing software Disbursa. Details provided online include funds requested; funds received, checks cut by category, the dates when checks were released, category balances, inspection pictures, inspection completion percentages by cost category, and four printable report formats.

Our experienced online construction disbursing helps provide loan to value monitoring, mechanic lien coverage, mechanic lien risk management, all to help protect your deed of trust.

Depending upon your needs our relationships with nationwide construction services can help provide you with an additional range of construction concierge services like:

• Architectural Reviews
• On-Site Construction Reviews
• 24-hour online construction/ jobsite surveillance cameras

The difference has to do with when they become effective.
Conditional lien waivers are the types of lien waivers we collect at NCD when we pay contractors, sub-contractors, and material suppliers directly. When I say paying “directly” it means that NCD is paying construction invoices with bank loan funds or owner equity funds on NCD checks.
A conditional lien waiver becomes effective only when the funds are deposited into the account of the payee – it is not effective until then. That is the “condition” – and allows the payee the security of knowing that only once the funds are in their account does it become effective.

An unconditional lien waiver is a full release of lien rights for a specific payment, which becomes effective immediately upon execution or signing.
We require this type of lien waiver for any reimbursement or as a proof of payment made by anyone else in the construction process. If a foundation company has paid for concrete and is seeking reimbursement for those funds – we must have an unconditional lien waiver from the concrete supplier for that amount – with the appropriate invoice.

Residential draws should be limited to twice monthly and commercial draws be completed once a month – but we remain ready to provide our construction partners with the flexibility to create additional draws in order to assure construction progress. There are no additional fees for these added draws.