HUD 1 Settlement Statement- Land Contracts,
What is HUD-1 Settlement statement
The HUD-1 Settlement statement is used where the services and fees which are charged during application of a loan or purchasing or refinancing are itemized. HUD is the short form for the Department of Housing and Urban Development.
The borrower can inspect the HUD-1 Settlement statement a day prior to the settlement. This settlement is done by the settlement agent.
This HUD-1 Settlement statement also has in it a Good Faith Estimate. This specifies the estimated settlement numbers which are provided by the lender when the loan is applied for. In the HUD-1 Settlement statement the borrowers can compare it to the Good Faith Estimate and then the lender or the broker can be questioned in case of any changes.
This form was used by the closing agent who used to itemize all the charges which are imposed on the borrower as well as the seller where there are real estate transactions which are made. This HUD-1 settlement statement informs the party and gives a complete list of the funds which are both incoming as well as outgoing. Whatever fees are part of the closing and paid prior to it are also part of the HUD-1 statement.
In 2015, on the 3rd October, there were new rules which were established by the CFPB and in this the HUD-1 Settlement statement is now obsolete and this HUD-1 Settlement statement has now been replaced with a closing disclosure document that not only consists of the HUD-1 but it contains the Good Faith Estimate as well as the disclosures of the Truth in Lending Act.
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