Ability to mark owned lot for a construction loan as subject property

Available: Now as Opt-In

How to turn on:

This will not automatically be turned on for our customers. It will be available beginning on the dates listed above. If you’d like to take advantage of this functionality, please email support@blend.com .

Purpose of Update and Benefit:

This release will add the "Mark as subject property" checkbox to the REO section when the lot is owned by the borrower to construction loans. As a result, when a lot is owned, the loan is treated more like a refi.

In addition, similar to refi loans, we will automatically create an REO and mark it as subject property if the response to the "Currently own lot?" question is “Yes”. Loan team members will need to make updates in the subject property info in order to reflect that in the REO. Also like

refi loans, the loan team members can deselect a property and mark a different one as subject property.

This feature was built to improve the functionality of construction loans in Blend, and to address an issue with how the REO for construction loans with owned lots are exported to Encompass. As this is an opt-in feature, all lenders can choose whether they want to enable this in their environment. However, only lenders who process construction loans in Blend or use Encompass will see the benefits outlined here.

Current Behavior:

Currently, construction loans where the borrower owns the lot do not have the ability to connect an REO to the subject property. This causes issues in Encompass, where all property placed in the REO section exports to Encompass as additional property rather than the subject property.

New Behavior:

When enabled, any time a loan team member creates a loan with Loan purpose = Construction and selects “Yes” for “Currently own lot?,” an REO is automatically added to the loan and marked as subject property via a new checkbox.

The locked fields in the REO, including Property Address, can only be changed via the Subject Property Information section.

Additionally, this feature will update the generated MISMO file to accommodate this new behavior. Any lot/parcel ID entered on a lot used to auto-generate an asset. Since we will now also auto-generate an REO, we've combined the two so that there are no duplicate assets in the MISMO. The lot/parcel ID is still included in the asset details.

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