New rules on Construction Lending
Building companies such as DR Horton have been using affiliated title services and construction lending for decades in an effort to create efficiency and convenience for home buyers. Such arrangements haven’t been a large profit center for them, but they have provided their clients a one-stop shop.
The new CFPB rule limits the fees that can be charged in connection with the home purchase to 3% of the amount financed. That has been a rule for a couple of years for every company, but the new rule includes title searches, inspections and settlement services along with other closing costs when the companies provided such services are associated with the home builder.
Cost conscious home buyers have chosen CCS Loans as a strong alternative to the in-house financing option for many years. With the rule changes, we just may need to hire some more people.