The HUD-1 Settlement Statement is a form used by the settlement agent (also called the closing agent) to itemize all charges imposed upon a borrower and seller for a real estate transaction. It gives each party a complete list of their incoming and outgoing funds. It details all of the monies associated with the transaction. Fees associated with the transaction but paid prior to closing are also included on the HUD. They are normally marked "POC," for Paid Outside of Closing.
When is the HUD-1 Used?
The statutes of the Real Estate Settlement Procedures Act (RESPA) require the form be used as the standard real estate settlement form in all transactions in the United States which involve federally related mortgage loans. The HUD-1 was recently revised to become a standard form across the country.
When is the HUD-1 Distributed?
RESPA states you should be given a copy of the HUD-1 at least one day prior to settlement. However, in some cases, entries may still be coming in a few hours before closing. Most buyers and sellers study the statement on their own, with their real estate agent, and with the settlement agent.
As a party to the transaction, you should ask as many questions as necessary to help you understand all charges. Please don't assume that the HUD-1 is correct. Mistakes or errors could happen. It's your right to understand the financial side of your transaction, and to ensure that it's correct. Your lender (if you are the borrower), the settlement agent, and the real estate agent should be able to assist you as you read over the form.
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