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New Changes To The HUD-1 Settlement Statement
By Troy Steuwer | January 22, 2010
Our team took a class yesterday (thanks SETCO!), letting us know everything about what’s being changed on the HUD-1 Settlement Statement as of January 1st, 2010. The class was given to us by George Brannon Sr, one of the smartest men we know. Anyway, a lot of things have changed on the HUD-1 Settlement Statement and I’m hear to tell you about them.
What most of the changes revolve around is the Good Faith Estimate (GFE). The GFE was designed to inform Buyers what fees they can expect to see at closing. The new GFE is one of the great things to come of the many changes. Here’s the purpose of the GFE, straight from the form:
“This GFE gives you an estimate of your settlement charges and loan terms if you are approved for this loan. For more information, see HUD’s Special Information Booklet on settlement charges, your Truth-In-Lending Disclosures, and other consumer information at www.hud.gov/respa. If you decide you would like to proceed with this loan, contact us.”
Putting the entire form into Lamen’s terms, the basics include a summary of your loan (e.g. term in years, interest rate, monthly payment, etc), escrow amount, origination charges, and other settlement charges. The kicker here is that the origination charges can NOT be changed from the date your receive the GFE to the time of closing. This is a win for Buyers around the country.
The rest is pretty much an estimate of various other charges such as title fees, owners insurance, government recording charges and more. Those, obviously, can vary.
Another great addition to this form is the section on the third page that lets you compare multiple loans all at once. Simply ask for the GFE (note: you’re supposed to be given this within 3 days of application, according to law) and jot down whats in each section.
When you finally make it to closing, you’re supposed to be able to look at your GFE, along with your HUD-1 Settlement Statement, and compare the both and no changes should occur. In some circumstances, if they do change, the Lender will have to make up the difference because they told you something else.
[SETCO, Image Credit: JohnHallAssoc on Flickr]
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