The Uniform Settlement Statement

Advertising Disclosure

A uniform settlement statement, or HUD-1 form, unlike the truth in lending statement, is the document to which you want to pay close attention. This document is intended to accurately reflect your true interest rate and costs and is the final mortgage settlement statement. If a loan officer neglects to tell you a few things (like the fact that you are not getting a par interest rate), it will show up in this statement.

What is a HUD-1 Form?

The HUD-1 settlement statement is a standard government real estate form used to itemize all charges imposed upon a borrower and seller for a real estate transaction.

When is a HUD-1 Form Required?

HUD stands for the Department of Housing and Urban Development. Then Congress enacted the Real Estate Settlement Procedures Act (RESPA), which authorized HUD to prepare and implement a uniform settlement statement. Recently, this form was updated with the intent of assisting potential homebuyers in fully understanding their costs. The HUD-1 must be used in any transaction where a federally regulated mortgage is involved.

If you applied for a mortgage on or before October 3, 2015, you should have received a HUD-1 statement. After October 2015, borrowers began receiving a form called the Closing Disclosure instead of a HUD-1 for most kinds of mortgage loans as a response to TILA RESPA Integrated Disclosures or simply TRID, which overhauled the way mortgages are now processed and closed.

Where Are HUD-1 Used Today?

The HUD-1 settlement statement is still used today but only for reverse mortgages.

When is a HUD-1 Provided to the Borrower?

Prior to October 2015, RESPA stated that a borrower should be given a copy of the HUD-1 at least one day prior to closing. In actuality, changes to the HUD-1 could be done just hours before closing. Most buyers review this document with their real estate agent to make sure there are not any errors. When it comes to both the HUD-1 and the Closing Disclosure, don’t assume the figures are correct. Mistakes happen and errors can be found at the last minute. Make sure all information and figures are accurate prior to signing the closing documents.

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