Builders Disbursements Inc. is alicensed escrow company. This escrow company is required to be a member of Escrow Agents’ Fidelity Corporation (EAFC), which indemnifies only its members, against the loss of trust obligations as a result of the fraudulent or, dishonest abstraction misappropriation, or embezzlement of trust funds by an officer, director, trustee, stockholder, manager, or employee of a member. Indemnification is subject to the limitations set forth in Chapter 2.5 (commencing with Section 17300) of Division 6 of the Financial Code. A copy of those Financial Code sections and EAFC’s most recent condensed financial statements are available, upon request, from this member.
Our escrow company issubject to annual certifiedaudits and unannounced audits by the State of California Department of Corporation.
Once a project is established, funds are advanced to BDI using a draw schedule designed specifically for the project. Partial draws may be made to minimize unnecessary interest expenses to the borrower. BDI asks the construction lender to forward all California Preliminary Notices to our office. These notices are entered into our computer in order to insure that releases are obtained at the point-of-payment. Subcontract values are compared to the line item budgets to help verify budget sufficiency.
Periodic site reviews are performed by our staff in order to determinethe percentage of completion on a line-item basis for your project. A computer printout, written narrative, and digital color photographs complete the site review package. Site reviews are done twice monthly for all commercial, multi-family and apartment/condominium projects. Single family residences are reviewed monthly.
BDI requests that change orders and transfers of funds between line items are handled by our office so that total accounting integrity is maintained at all times.
At the end of the project we will work in concert with the general contractor (or owner/builder) to record the Notice of Completion. A Final Payment Affidavit is obtained by BDI from the contractor or owner/builder which accounts for all vouchers and voided vouchers. A retention amount (ordinarily 5%) is maintained by the lender and is not funded to BDI until the expiration of the lien period. These retention funds are deferred from the general contractor’s profit/overhead/ supervision and provide the lender with a hedge against unforeseen circumstances such as cost overruns, etc..
Our programs have been designed to encompass virtually the entire spectrum of the disbursement process. As such, bank personnel are at liberty to focus on other issues central to good lending.