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HUD-1

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Author:  Rob K. Blake        Published: August 29, 2008

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HUD-1 Defined

The HUD-1 is a document required by RESPA (Real Estate Setllement and Procedures Act, the controlling Federal law) to show actual charges and adjustments for all parties including the seller, buyer, agents, lenders, and all third parties.

Another name for the HUD-1 is the closing statement or settlement sheet.

A HUD-1 is signed by the buyer, seller, and closing agent at closing. For a refinance, only the borrower and closing agent sign the HUD-1.

The Good Faith Estimate is supposed to be an initial estimate of what will be on the final HUD-1. But, it doesn’t always work that way.

The Good Faith Estimate is used more to get a borrower in the door than to accurately disclose the charges, fees, and adjustments. Many borrowers don’t see the real charges until the final HUD-1 at closing and by then it is too late.

Federal law allows for the HUD-1 to prepared for review 24 hours in advance of the closing…but only if the borrower request it.

So request it. This is one weapon in the fight against last minute charges or “bait-n-switch” tactics.

People in the mortgage industry just call it “the HUD”. It confuses some borrowers because they think is has to do with a special HUD mortgage or HUD home but it is just an abbreviation of the full document name.

Author: Rob K. Blake

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    2 Comments

    1. PaulNo Gravatar on 12.09.2008 at 13:49 (Reply)

      Are HUD 1 settlement sheets public record?

    2. Rob K. BlakeNo Gravatar on 12.09.2008 at 15:49 (Reply)

      Paul,

      Excellent question and “no” they are not public record even though they are federally controlled.

      I guess one could still request a HUD-1 through the Freedom of Information Act, but walking down to the local court house, won’t produce anything.

      RKB

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