Master Guidance Line Documents

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A master deed of trust for a guidance line of credit allows builders and lenders to expedite residential construction and lot loan transactions. Once the master deed of trust is recorded in the county in which a construction project is located, the builder and lender simply execute a few documents that refer to the master deed, and a secured loan for specific pieces of the project can be closed. With less documentation, both the builder and the lender save time and resources, and projects move faster.

Texas-based PPDocs has advanced this process even further. First, PPDocs has developed master guidance line documents, including a master deed of trust, that address the major issues that are important to lenders and builders alike. Second, PPDocs has already recorded that master deed of trust in more than 40 counties in Texas.

In practice, a builder and lender that want to use the PPDocs master guidance line documents sign the master trust deed documents at the beginning of a specific period of time (typically one year), and designate authorized agents to sign supplemental documents for individual loan transactions. This allows the lender to close loans more quickly, with the protection the lender needs to underwrite subsequent loans and to control risks. The builder’s agent signs a short form deed of trust for each transaction that refers back to the master deed of trust, saving the builder substantial recording and other fees.

  • A builder-borrower that is ready to request an interim residential loan or lot closing transaction sends a physical or electronic request for the loan to the lender.

  • Once the loan request is approved, the lender uses the information in the builder’s request to populate a short form deed of trust and closing instructions, which are typically less than three pages each. In counties that enable electronic recording, these documents are scanned and the title company quickly closes the loan.

  • The builder’s designated agent can sign all documents at the title company office, freeing up the builder-borrower to begin the project.

  • This process is easily replicated for each loan request.

  • PPDocs has already recorded the master deed of trust in 40 of the more populated Texas counties. More than 30 of those counties accept electronic recording, which further expedites the process. Lenders save substantial amounts of time and recording fees.

  • The master deed of trust is not lender-specific, and can be used as a foundation document by any lender. Specific short form deeds of trust for subsequent individual transactions can include lender-specific terms and conditions, and need only refer back to the master deed.

  • Lenders still approve each loan per their own internal procedures and create a master loan agreement and document set for each approved loan. Once the master agreement is created, the lender simply enters the appropriate loan terms and conditions into PPDocs’ master construction document online forms. PPDocs then generates a master construction loan document, specific guarantees, and resolutions at no additional charge to the lender.

  • If the lender wishes, PPDocs can also generate either a master promissory note to cover every transaction under the guidance line, or individual notes for each separate transaction.

How it works

How the Master Works

We have already recorded Master Deeds of Trust in 40 Texas counties. These Master Deeds of Trust are not lender specific; they don’t have to be. At subsequent closings, a lender may reference the pre-recorded Master Deed of Trust in each property specific Short Form Deed of Trust. However, a Master Deed of Trust must be pre-recorded and the original returned with recording information before individual closings can be accommodated in that particular county.

Lender Approves Each Loan and Property

Like all other loans, the lender must get the appropriate approval from their loan committee or other loan approval process for the specific loan agreement and property. Once approved, the lender may create the Master Loan Agreement terms and the Master document set.

After the Master Loan Agreement is created, lender's personnel input the applicable borrower information, loan terms and conditions in our Master Construction Documents online order form. From that information our automated system will produce the Master Construction Loan Agreement, requested guaranties, and any requested entity resolutions. We do these for FREE!

The lender is also given the option to have one Master Promissory Note covering all transactions under the guidance line or individual Notes for each individual construction and lot transaction.

How Subsequent Closings Work

Borrower Requests Specific Loan Approval

When the borrower is ready to request consideration for an interim residential loan transaction or lot closing under the agreement, the borrower sends the request to the lender (via fax, email or otherwise) on the form agreed to on Exhibit A to the Master Construction Loan Agreement.

Lender Creates Loan Specific Data and Sends Short Package to Title Co.

If approved, the lender can go online and complete the screens necessary for the specific property and loan advance. From that information our automated system will produce the Closing Instructions (3 pages), Short Form Deed of Trust (3 pages), Attorney’s Notice and Document Correction Agreement (2 pages), and Attorney Invoice. Full service where we review Title and Survey is available upon request.

If the county the property is located in accepts paper real estate loan filings electronically (“eRecording”) the lender can instruct the title company to e-record or if the title company is not set up to eRecord, return the original deed of trust to lender for the lender to scan to PPDocs for eRecording. No More “Early Starts”!!!

Builder Signs Short Package at Title Co.

The builder, or any other authorized party he/she designated in the Master Doc set, can sign on behalf of builder.


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