Consumer Construction Lenders: Key Questions for Process Auditing

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Built Team
PUBLISHED: 03/22/2021

Borrowers are inclined to go where they can get the funding they need the fastest and most efficiently—if your lending processes are not up to par, your name will quickly be scratched off the top of their list. Lenders who use Built for construction loan administration are able to provide swift customer service on top of a streamlined experience for borrower and lender alike. We take the needs of our customers seriously and have compiled their feedback with our team’s expertise and turned it into some questions that the best lenders consider while auditing the construction loan administration processes:

  • If you were to audit your portfolio, what percentage of loans are within compliance?
    • Is that percentage higher or lower than 10%?
      • What do you do with the loans that do not reconcile properly?
  • How many of your loans would need fees refunded to the customer?
    • How much money have you lost in fee waivers?
  • What percentage of your portfolio has construction percentage complete over time elapsed percentage? And, to follow up: Is the loan in danger of extending past the maturity date?
    • Are extensions an option?
    • How many loans require extensions?
    • Is permitting the reason behind extensions?
  • What percentage of your portfolio has been funded greater than the % complete?
  • When was the last time you did a credit check on active Contractors?
    • Do any of your projects have a Contractor whose risk insurance expires before the scheduled completion date of the project?
      • Could your turn time be faster and as a result could you make more interest income?

Accessible data is key for making informed decisions. Your entire team can utilize reports and dashboards within Built to monitor key performance trends, evaluate each of your borrowers’ projects individually, and benefit from proactive monitoring alerts. First Federal Savings Bank of Twin Falls, a consumer construction lender, has been able to get more work done, faster, as a result of adopting Built. In 2020 alone, they completed over 3,000 draws and 3,000 inspections within the platform.

As you prepare for the future, here are a few more things to consider.

  • What are your growth projections and do you have enough staff to manage the current growth?
  • Do you have reporting at a glance that will tell you the status of your portfolio?
  • Do you offer Investor Loans and are you delivering them on time?
    • What continued reporting do you have to determine if they are on schedule for delivery?
  • How often are you following up on trailing documents?
    • Do you feel this is being sufficiently managed?
  • In the event of a natural disaster or market decline, how quickly can you identify all potential collateral impacts?
  • Are you meeting state or federal regulations?
    • Is the team audited to these and do they know what they are missing yet?
  • How long does it take your team to get all of the above information?

These questions were created to be a jumping off point for you and your team as you consider what your next steps should be for more efficient construction loan administration. Your customers’ experience is top of mind—it is for us, too. Built is proactively considering these as we build our software with your end goals at the forefront of these workflows. To access the most accurate data and information while getting ahead of the curve, choose Built for consumer construction loan administration.