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|HUD 1 is a standard form that must be used by the settlement agent to itemize fees and charges that a borrower needs to pay in order to close a mortgage deal. Though the Settlement Statement Form is filled by a closing agent, the borrower has every right to inspect the HUD 1 and compare the items on it to those listed on the Good Faith Estimate (GFE). Moreover, the borrower may ask the lender or broker to make necessary changes on the form in case of any discrepancy.
Under Real Estate Settlement Procedures Act (RESPA), it is binding for the lenders to keep their potential customer informed about all that may come during the entire process of a mortgage deal. The information pertaining to aggregate closing costs, lender servicing, escrow account practices and various kinds of fees and charges along with taxes and tax deductions must be furnished to the borrowers. A Good Faith Estimate supplied by the lender is what lists all fees, costs and charges to be paid by the borrower for mortgage approval.
HUD 1 Good Faith Estimate
The Good Faith Estimate must include all items associated with your home loan along with their costs, fees or service charges. Moreover, the lender must supply it to the borrower within three business days of loan application so that you have enough time to make an accurate judgment.
A Good Faith Estimate may include following categories of fees and charges:
You can use this GFE to compare items on it to those found on the HUD 1 Settlement Statement Form at the time of closing.
- Loan Fees
- Title Charges
- Fees to be paid in Advance
- Government Charges
- Additional Charges
HUD 1 Settlement Statement Form
HUD 1 Settlement Statement Form or simply HUD 1 Form is one of the important documents that your lender gives to you on or before the closing day. The other documents that you get on this day are Truth-in-Lending Statement, Mortgage or Deed of Trust, Mortgage Note, Binding Sales Contract and of course the keys to your new home. The HUD 1 Form, as stated earlier, is filled by the closing agent and contains a list of all services and fees charged by your lender. The form also includes the fees paid prior to closing and these are marked “POC”, which stands for Paid Outside of Closing.
The year 2010 will see HUD 1 forms in a new format that is easy to read, understand and complete. It will help you compare the things present on the GFE and the uniform settlement statement form in a more understandable manner easily and swiftly. A major change in the format is the availability of HUD1 form in an excel template, though the fill-able PDF samples are still available for use. Instructions have been provided that give you enough explanation on how to fill the form completely and accurately. Despite this, a closing agent may require some training to understand HUD 1 addendum and the requirements for this new format in order to use it effectively.
When is HUD 1 Required?
As per the Real Estate Settlement Procedures Act (RESPA), the HUD 1 form is required in all transactions which involve federally related mortgage loans. It is a common practice in the US to use HUD form in a transaction that involves a buyer and a seller, and also that includes cash closings. If there is a one party transaction that does not require the transfer of title by the seller, you have to use a HUD 1A form that is also available in a fill-able PDF format. A HUD 1A form is for transactions without sellers and is generally used for refinancing and subordinate lien federally related mortgage loans.
HUD 1 Software
It is possible to download free HUD1 templates in Microsoft Excel and Word format online. For massive use, you can download HUD 1 software that helps you print several copies of forms and also allows you to enter information through keywords in an automated manner, thus helping you with less paperwork. One such website that allows you to download a free HUD 1 Generator program is www.lawfirmsoftware.com, which also sells 2010 upgraded version of HUD1 RESPA software. There are others that let you download HUD Creator.xls and HUD 1 Short Sale Generator for free. Automated HUD 1 form worksheet and template helps you keep the possibility of a fraud at bay and lessen substantially the paperwork involved in the process.
To get a more clear definition of all that has been mentioned above and use resources, such the HUD’s new Settlement Cost Booklet, HUD 1 instructions, calculator, letter, net sheet, RESPA rules, GFE instructions, Loan fraud & scams and also to see what does a HUD 1look like, follow the link given below:
Get a fill-able HUD 1 form in pdf format with instructions to fill it properly from the official website of the US Department of Housing and Urban Development.