Archive for the ‘Hud-1’ Category

What is the HUD-1 and when is it used?

March 27th, 2011 Comments off

The HUD-1 is a form used by the settlement agent (also called the closing agent) to list all the costs imposed upon a borrower and seller for a real estate transaction. It gives each party a complete list of their funds in and out. Fees associated with the transaction, but paid before closing are also included on the HUD. They are normally marked “POC” for paid outside of closing.

When is the HUD-1 used?
The statutes of the Real Estate Settlement Procedures Act (RESPA) to require the form to be used as the standard composition in all real estate transactions in the United States, involving its federal mortgage. It is used for almost all transactions involving a buyer and seller, including cash closings.

When is the HUD-1 Distributed?
RESPA states that you should be given a copy of the HUD-1 at least one day prior to settlement. In real life, entries may still be coming in a few hours before closing. Most buyers and sellers study the statement on their own, with their real estate agent, and the settlement agent. The more people to review it, the more likely that errors will be detected. Do not assume that the closing agent is always correct. Mistakes happen, many times an error was found at the last minute. Ask as many questions as necessary to help you understand all the charges.

Section B-1 offers real estate education HUD settlement with the type of loan.
Articles in this section include: the type of loan: You select the type of loan, such as whether it is FHA, VA, conventional and whether insured or not. Note that the sample HUD-1 is used by the government website does not show the point 6, Seller Financing. This article has been used by the title companies, in most cases. The identification numbers for the loan and the transaction: the title company has a file number for the transaction, and the lender will have a number of loan. If it is a secured loan, there will be a file number.

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New RESPA Regulations: What Lenders Should Know

March 17th, 2011 Comments off

** From 1 January 2010, the latest changes to the Real Estate Settlement Procedures Act (RESPA) entered into force for all the “creative lending” – banks Credit and mortgage broker – managing federal loans for residential real estate. RESPA revisions were intended to provide consumers with a means to better understand their obligations in terms of the loan. The burden for ensuring compliance with these regulations, however, falls exactly on the banks.

good faith estimate (GFE)


In addition, the GFE must contain a detailed list of all the expenses of origin (including yield spread premium if applicable) and the list of all transaction costs.

The GFE must be provided in a standardized form approved by HUD. Lenders are not allowed to make changes to any language on the form or add additional pages or additions. If the loan provides for a payment other than monthly, then the lender must make a monthly payment of the loan for the purpose of the form.

If the borrower requires two mortgages for a single property, a GFE should be completed for each loan.

While a mortgage broker can provide the borrower with a copy of the GFE within three days of business, the ultimate responsibility to ensure that the borrower has received a copy of it falls within the allotted time the lender.

HUD-1 Settlement Statement (HUD-1)


A chart is included in the HUD-1, which compares all actual costs at closing for the estimation of the costs contained in the GFE. If any of the actual costs exceed the estimates provided in the GFE by more than the tolerance given, then the lender is prohibited from accepting the old from the borrower.

The HUD-1 form must also include a final summary of the key terms of the loan. The creditor must provide this information to the settlement agent in a format that allows the agent to fill in the blanks on the HUD-1 without having to refer to the documents of the loan value.

Just as the GFE or the lender or settlement agent can change the language included in the standard form HUD-1. The borrower must be provided with a copy of the form completed and signed before leaving the closure.


Zero Tolerance:

• • Origination charges adjusted origination charges after the interest rate has been locked • Points to lock in interest rates • Government transfer taxes 10% Tolerance:

• Lender required settlement services (if the borrower chooses a servicer provided or identified by the lender) • Services required under Lender and title insurance (if the borrower chooses a servicer provided or identified by the lender) • Owner’s title insurance (if the borrower chooses a servicer provided or identified by the lender) • Registration fees • Government Services required that the borrower may purchase if the borrower chose to selected companies or identified by creditor


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New HUD Rules Mean No More Closing Cost Surprises

March 13th, 2011 Comments off

Article by A. Myers Kennedy

Many prospective homeowners have been shocked and surprised when they arrive at the closing table. To date, most homeowners have only been supplied with a good faith estimate showing their potential closing costs and fees; none of which were set in stone. The difference between good faith estimates and actual closing costs have even forced some home buyers to walk away from the home of their dreams that they were so close to owning.

Closing costs aren’t really that mysterious and scary, but each lender has their own fees and costs for items like appraisals and even title fees. The mortgage industry has many different factions, but after many years HUD has put new rules in place to curb the last-minute surprises at closing. These rules went into effect January 1, 2010 and are designed to not only prevent unplanned closing costs for the home buyer, but to save them money as well.

The good faith estimate will see the most significant changes and for good reason. For many home buyers, especially first time buyers, this document is their only guideline for the costs they are about to incur with buying a home. A Good Faith Estimate is given to borrowers, from their lender, when they apply for a mortgage. Most good faith estimates will change several times during the buying process and should definitely change when the property a buyer is interested in changes.

The new and improved good faith estimate now requires the lender to disclose features that may drive up the costs. Information about increases in interest rates before closing is a major factor. This is most helpful for borrowers that are applying for an adjustable rate mortgage. If the loan includes a balloon payment or early payoff penalty, that must be stated as well.

The good faith estimate now has to be on a uniform three-page document when given to the prospective borrowers and home buyers should have a copy of their Good Faith Estimate within 72 hours (business hours that is) of applying for a mortgage. This document allows the borrower to figure out the total cost, closing costs and monthly payments before sitting down to sign the final paperwork on a home.

The new good faith estimates will allow homebuyers to compare loan offers from different financial institutions as well. Shopping for the best deal could mean the difference between waiting and buying for many first timers. Since the new rules also require that lenders give mortgage applicants a copy of their settlement cost, the HUD-1, no less than one day before closing, homebuyers can walk up to the closing table confident about their financial decision. Lenders must make sure that the settlement figures match the good faith estimate line by line, allowing the borrowers to see any changes in costs.

While cost from 3rd party sources such as title insurance and appraisals are allowed to increase up to 10% from what is on the good faith estimate and the actual fees at closing, lenders are no longer allowed to increase any fees charged by them.

Whether buying a home on the traditional market or purchasing a foreclosure or REO property, in the end, the settlement process of a mortgage, the closing, shouldn’t ruin the joy for prospective homeowners. These new rules by HUD will eliminate the confusion many have experienced in the past and home buyers will be more educated before the big day.

About the Author

Trent Realty, Florida REO and Florida Real Estate professionals, provide up to date information and changes in the world of real estate. Visit the Trent Realty Blog to stay informed and let Trent Realty help you find that perfect Florida home for sale.

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Expert Real Estate Tips: What is a HUD-1 Form?

March 13th, 2011 Comments off

Expert Real Estate Tips: What is a HUD-1 Form?

What is a HUD-1 Form in real estate? The HUD-1 Form is a record of all money spent during the purchase of a home. Appraisals and other services are listed on the HUD-1 Form and many are tax deductible…

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Certified Copy of the final HUD-1 Settlement Statement v.s. Signed Copy of HUD-1, For 8K tax credit.?

March 8th, 2011 Comments off

Question by csewell44: Certified Copy of the final HUD-1 Settlement Statement v.s. Signed Copy of HUD-1, For 8K tax credit.?
I am trying to get my paperwork together to file for the 8K tax credit, however I only have a HUD-1 signed by myself and not the seller. The IRS came out saying they need a HUD-1 signed by ALL parties. I have contacted my title agency and they have told me “due to privacy laws we cannot provide you with a signed copy of the sellers HUD-1” They told me that a “Certified Copy of the final HUD-1″ signed by them would be just fine. Are they correct, or does anyone know any more about this?? Thanks

Best answer:

Answer by mysticgraystar
Send COPIES of the HUD-1 that is signed by the title agency and you. Write a statement to the IRS indicating that your title agency WILL NOT give you a copy of the HUD-1 signed by the seller due to ‘privacy laws’.

The IRS will also need a copy of your Mortgage statement (or proof you paid cash for the property) and one of 4 documents proving you live at your new home (the proof they ASK FOR is 1. Driver’s license or ID with new address; 2. Copy of vehicle title showing new address; 3. Recent pay statement with new address; or, 4. Recent bank statement showing new address.)

If they do not approve of the copies you send, they will disallow the credit; you should IMMEDIATELY APPEAL that decision and you will be scheduled to see an agent. Bring the documents that you DO HAVE to the agent and he/she usually signs off on the credit.

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