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What is a HUD-1 Settlement Statement? Real Estate Terminology Explained

By
Real Estate Agent with North Texas Top Team, REALTORS (Plano, Murphy, Wylie) TX Lic# 055794

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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Melissa Hailey, Broker-Owner
REALTOR, CRS, GRI, SFR, TAHS, TREC-Approved Real Estate Instructor

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Comments (4)

Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Thanks for posting. We always learn a lot of good information from Active Rain blogs. Best Regards

Apr 20, 2010 03:44 AM
Robert Rauf
CMG Home Loans - Toms River, NJ

And The Hud1 is the most important document in the transaction for both the buyer and seller, and you should keep it in a safe place since it shows pay offs etc!

Apr 20, 2010 03:53 AM
Pam Turner, REALTOR®, e-PRO®, SFR
Century 21 Belk Realtors Dalton GA - Dalton, GA

The HUD statement has been around a long time, but still a mystery to some - thanks for the info!

Apr 20, 2010 03:53 AM
Robert Rauf
CMG Home Loans - Toms River, NJ

And The Hud1 is the most important document in the transaction for both the buyer and seller, and you should keep it in a safe place since it shows pay offs etc!

Apr 20, 2010 03:59 AM