The settlement statement or HUD can be a confusing document if you don't understand the layout and flow. First, a HUD is generally divided into two sections.
1. Page one is the complete settlement statement. Page 1 is divided into two half's, the left side is the buyers credits and debits and the right side the sellers credits and debits.
2. Page two (and sometimes page three), is a breakdown of the individual charges that appear as a total on page one.
In some instances, you'll see where the numbers are the same on both the sellers side and the buyers side. These equate to an amount that is transferred between the parties. Usually a pro-rated amount that one side owes the other for future or past payments. An example of this would be HOA fees the seller has paid up until the end of the year. Those monies would be reimbursed to the seller by the buyer on the HUD. So a credit to the seller, debit to the buyer. The reserve would be true for property taxes since they are paid in arrears. The seller would be debited their prorated portion of taxes and the buyer would be credited for the time the seller owned the property until the closing date.
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