HUD-1 Settlement Statement
The HUD-1 Settlement Statement is a document that is used by settlement (or closing) agents as a way to itemize all charges that the borrower and seller is responsible for during a real estate transaction. It is a form that has to be used in all transactions in the United States that involve federally related mortgage loans as it is one of the statutes of the Real Estate Settlement Procedures Act (RESPA).
A simple form that itemize each expense line by line, the HUD-1 Settlement Statement simplifies the closing procedure of a property transaction. The statement clearly states at the bottom the seller's net proceeds and the buyer's net payment at the time of closing. Issues such as real estate commissions, loan fees, initial escrow amounts are resolved within this document.
Under RESPA, the borrower is allowed to request the HUD-1 Settlement Statement one day before the actual settlement to review the statement. It is highly recommended that buyers, sellers, each parties' real estate representatives, and the settlement agent review the HUD-1 Settlement Statement prior to closing to ensure that there are no errors present on the form.
The HUD-1 Settlement Statement is made up of these sections:
· Section A: The U.S. Department of Housing and Urban Development Settlement Statement.
· Section B: Type of Loan.
· Section C: A note denoting how the form is a statement of actual settlement costs that although it includes items that were paid outside of closing, these items are not included in the totals.
· Section D: The name and address of borrower.
· Section E: The name and address of seller.
· Section F: The name and address of lender.
· Section G: Property Location.
· Section H: Name of the settlement agent and address of the place of settlement.
· Section I: Settlement Date.
· Section J: The summary of borrower�s transactions.
· Section K: The summary of seller�s transactions.
· Section L: Settlement Charges.
