Respa Hud-1 Settlement Statement Instructions
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§ 3500.22
Severability.
If any particular provision of this part
or the application of any particular
provision to any person or circumstance
is held invalid, the remainder of this
part and the application of such
provisions to other persons or
circumstances shall not be affected by
such holding.
12. A new § 3500.23 is added to read
as follows:
§ 3500.23
ESIGN applicability.
The Electronic Signatures in Global
and National Commerce Act (``ESIGN''),
15 U.S.C. 70017031, shall apply to this
part.
13. Appendix A to part 3500 is revised
in its entirety, including the heading, to
read as follows:
Appendix A to Part 3500--Instructions
for Completing HUD1 and HUD1a
Settlement Statements; Sample HUD1
and HUD1a Statements
The following are instructions for
completing the HUD1 settlement statement,
required under section 4 of RESPA and 24
CFR part 3500 (Regulation X) of the
Department of Housing and Urban
Development regulations. This form is to be
used as a statement of actual charges and
adjustments paid by the borrower and the
seller, to be given to the parties in connection
with the settlement. The instructions for
completion of the HUD1 are primarily for
the benefit of the settlement agents who
prepare the statements and need not be
transmitted to the parties as an integral part
of the HUD1. There is no objection to the
use of the HUD1 in transactions in which
its use is not legally required. Refer to the
definitions section of HUD's regulations (24
CFR 3500.2) for specific definitions of many
of the terms that are used in these
instructions.
General Instructions
Information and amounts may be filled in
by typewriter, hand printing, computer
printing, or any other method producing
clear and legible results. Refer to HUD's
regulations (Regulation X) regarding rules
applicable to reproduction of the HUD1 for
the purpose of including customary recitals
and information used locally in settlements;
for example, a breakdown of payoff figures,
a breakdown of the Borrower's total monthly
mortgage payments, check disbursements, a
statement indicating receipt of funds,
applicable special stipulations between
Borrower and Seller, and the date funds are
transferred.
The settlement agent shall complete the
HUD1 to itemize all charges imposed upon
the Borrower and the Seller by the loan
originator and all sales commissions,
whether to be paid at settlement or outside
of settlement, and any other charges which
either the Borrower or the Seller will pay at
settlement. Charges for loan origination and
title services should not be itemized except
as provided in these instructions. For each
separately identified settlement service in
connection with the transaction, the name of
the person ultimately receiving the payment
must be shown together with the total
amount paid to such person. Items paid to
and retained by a loan originator are
disclosed as required in the instructions for
lines in the 800-series of the HUD1 (and for
per diem interest, in the 900-series of the
HUD1).
As a general rule, charges that are paid for
by the seller must be shown in the seller's
column on page 2 of the HUD1 (unless paid
outside closing), and charges that are paid for
by the borrower must be shown in the
borrower's column (unless paid outside
closing). However, in order to promote
comparability between the charges on the
GFE and the charges on the HUD1, if a seller
pays for a charge that was included on the
GFE, the charge should be listed in the
borrower's column on page 2 of the HUD1.
That charge should also be offset by listing
a credit in that amount to the borrower on
lines 204209 on page 1 of the HUD1, and
by a charge to the seller in lines 506509 on
page 1 of the HUD1. If a loan originator
(other than for no-cost loans), real estate
agent, other settlement service provider, or
other person pays for a charge that was
included on the GFE, the charge should be
listed in the borrower's column on page 2 of
the HUD1, with an offsetting credit reported
on page 1 of the HUD1, identifying the party
paying the charge.
Charges paid outside of settlement by the
borrower, seller, loan originator, real estate
agent, or any other person, must be included
on the HUD1 but marked ``P.O.C.'' for ``Paid
Outside of Closing'' (settlement) and must
not be included in computing totals.
However, indirect payments from a lender to
a mortgage broker may not be disclosed as
P.O.C., and must be included as a credit on
Line 802. P.O.C. items must not be placed in
the Borrower or Seller columns, but rather on
the appropriate line outside the columns.
The settlement agent must indicate whether
P.O.C. items are paid for by the Borrower,
Seller, or some other party by marking the
items paid for by whoever made the payment
as ``P.O.C.'' with the party making the
payment identified in parentheses, such as
``P.O.C. (borrower)'' or ``P.O.C. (seller)''.
In the case of ``no cost'' loans where ``no
cost'' encompasses third party fees as well as
the upfront payment to the loan originator,
the third party services covered by the ``no
cost'' provisions must be itemized and listed
in the borrower's column on the HUD1/1A
with the charge for the third party service.
These itemized charges must be offset with
a negative adjusted origination charge on
Line 803 and recorded in the columns.
Blank lines are provided in section L for
any additional settlement charges. Blank
lines are also provided for additional
insertions in sections J and K. The names of
the recipients of the settlement charges in
section L and the names of the recipients of
adjustments described in section J or K
should be included on the blank lines.
Lines and columns in section J which
relate to the Borrower's transaction may be
left blank on the copy of the HUD1 which
will be furnished to the Seller. Lines and
columns in section K which relate to the
Seller's transaction may be left blank on the
copy of the HUD1 which will be furnished
to the Borrower.
Line Item Instructions
Instructions for completing the individual
items on the HUD1 follow.
Section A. This section requires no entry
of information.
Section B. Check appropriate loan type and
complete the remaining items as applicable.
Section C. This section provides a notice
regarding settlement costs and requires no
additional entry of information.
Sections D and E. Fill in the names and
current mailing addresses and zip codes of
the Borrower and the Seller. Where there is
more than one Borrower or Seller, the name
and address of each one is required. Use a
supplementary page if needed to list multiple
Borrowers or Sellers.
Section F. Fill in the name, current mailing
address and zip code of the Lender.
Section G. The street address of the
property being sold should be listed. If there
is no street address, a brief legal description
or other location of the property should be
inserted. In all cases give the zip code of the
property.
Section H. Fill in name, address, zip code
and telephone number of settlement agent,
and address and zip code of ``place of
settlement.''
Section I. Fill in date of settlement.
Section J. Summary of Borrower's
Transaction. Line 101 is for the contract sales
price of the property being sold, excluding
the price of any items of tangible personal
property if Borrower and Seller have agreed
to a separate price for such items.
Line 102 is for the sales price of any items
of tangible personal property excluded from
Line 101. Personal property could include
such items as carpets, drapes, stoves,
refrigerators, etc. What constitutes personal
property varies from state to state.
Manufactured homes are not considered
personal property for this purpose.
Line 103 is used to record the total charges
to Borrower detailed in Section L and totaled
on Line 1400.
Lines 104 and 105 are for additional
amounts owed by the Borrower, such as
charges that were not listed on the GFE or
items paid by the Seller prior to settlement
but reimbursed by the Borrower at
settlement. For example, the balance in the
Seller's reserve account held in connection
with an existing loan, if assigned to the
Borrower in a loan assumption case, will be
entered here. These lines will also be used
when a tenant in the property being sold has
not yet paid the rent, which the Borrower
will collect, for a period of time prior to the
settlement. The lines will also be used to
indicate the treatment for any tenant security
deposit. The Seller will be credited on Lines
404405.
Lines 106 through 112 are for items which
the Seller had paid in advance, and for which
the Borrower must therefore reimburse the
Seller. Examples of items for which
adjustments will be made may include taxes
and assessments paid in advance for an
entire year or other period, when settlement
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occurs prior to the expiration of the year or
other period for which they were paid.
Additional examples include flood and
hazard insurance premiums, if the Borrower
is being substituted as an insured under the
same policy; mortgage insurance in loan
assumption cases; planned unit development
or condominium association assessments
paid in advance; fuel or other supplies on
hand, purchased by the Seller, which the
Borrower will use when Borrower takes
possession of the property; and ground rent
paid in advance.
Line 120 is for the total of Lines 101
through 112.
Line 201 is for any amount paid against the
sales price prior to settlement.
Line 202 is for the amount of the new loan
made by the Lender when a loan to finance
construction of a new structure constructed
for sale is used as or converted to a loan to
finance purchase. Line 202 should also be
used for the amount of the first user loan,
when a loan to purchase a manufactured
home for resale is converted to a loan to
finance purchase by the first user. For other
loans covered by 24 CFR part 3500
(Regulation X) which finance construction of
a new structure or purchase of a
manufactured home, list the sales price of the
land on Line 104, the construction cost or
purchase price of manufactured home on
Line 105 (Line 101 would be left blank in this
instance) and amount of the loan on Line
202. The remainder of the form should be
completed taking into account adjustments
and charges related to the temporary
financing and permanent financing and
which are known at the date of settlement.
Line 203 is used for cases in which the
Borrower is assuming or taking title subject
to an existing loan or lien on the property.
Lines 204209 are used for other items
paid by or on behalf of the Borrower. Lines
204209 should be used to indicate any
financing arrangements or other new loan not
listed in Line 202. For example, if the
Borrower is using a second mortgage or note
to finance part of the purchase price, whether
from the same lender, another lender or the
Seller, insert the principal amount of the loan
with a brief explanation on Lines 204209.
Lines 204209 should also be used where the
Borrower receives a credit from the Seller for
closing costs, including seller-paid GFE
charges. They may also be used in cases in
which a Seller (typically a builder) is making
an ``allowance'' to the Borrower for items that
the Borrower is to purchase separately.
Lines 210 through 219 are for items which
have not yet been paid, and which the
Borrower is expected to pay, but which are
attributable in part to a period of time prior
to the settlement. In jurisdictions in which
taxes are paid late in the tax year, most cases
will show the proration of taxes in these
lines. Other examples include utilities used
but not paid for by the Seller, rent collected
in advance by the Seller from a tenant for a
period extending beyond the settlement date,
and interest on loan assumptions.
Line 220 is for the total of Lines 201
through 219.
Lines 301 and 302 are summary lines for
the Borrower. Enter total in Line 120 on Line
301. Enter total in Line 220 on Line 302.
Line 303 must indicate either the cash
required from the Borrower at settlement (the
usual case in a purchase transaction), or cash
payable to the Borrower at settlement (if, for
example, the Borrower's earnest money
exceeds the Borrower's cash obligations in
the transaction or there is a cash-out
refinance). Subtract Line 302 from Line 301
and enter the amount of cash due to or from
the Borrower at settlement on Line 303. The
appropriate box should be checked. If the
Borrower's earnest money is applied toward
the charge for a settlement service, the
amount so applied should not be included on
Line 303 but instead should be shown on the
appropriate line for the settlement service,
marked ``P.O.C. (Borrower)'', and must not be
included in computing totals.
Section K. Summary of Seller's
Transaction. Instructions for the use of Lines
101 and 102 and 104112 above, apply also
to Lines 401412. Line 420 is for the total of
Lines 401 through 412.
Line 501 is used if the Seller's real estate
broker or other party who is not the
settlement agent has received and holds a
deposit against the sales price (earnest
money) which exceeds the fee or commission
owed to that party. If that party will render
the excess deposit directly to the Seller,
rather than through the settlement agent, the
amount of excess deposit should be entered
on Line 501 and the amount of the total
deposit (including commissions) should be
entered on Line 201.
Line 502 is used to record the total charges
to the Seller detailed in section L and totaled
on Line 1400.
Line 503 is used if the Borrower is
assuming or taking title subject to existing
liens which are to be deducted from sales
price.
Lines 504 and 505 are used for the amounts
(including any accrued interest) of any first
and/or second loans which will be paid as
part of the settlement.
Line 506 is used for deposits paid by the
Borrower to the Seller or other party who is
not the settlement agent. Enter the amount of
the deposit in Line 201 on Line 506 unless
Line 501 is used or the party who is not the
settlement agent transfers all or part of the
deposit to the settlement agent, in which case
the settlement agent will note in parentheses
on Line 507 the amount of the deposit that
is being disbursed as proceeds and enter in
the column for Line 506 the amount retained
by the above-described party for settlement
services. If the settlement agent holds the
deposit, insert a note in Line 507 which
indicates that the deposit is being disbursed
as proceeds.
Lines 506 through 509 may be used to list
additional liens which must be paid off
through the settlement to clear title to the
property. Other Seller obligations should be
shown on Lines 506509, including charges
that were disclosed on the GFE but that are
actually being paid for by the Seller. These
Lines may also be used to indicate funds to
be held by the settlement agent for the
payment of either repairs, or water, fuel, or
other utility bills that cannot be prorated
between the parties at settlement because the
amounts used by the Seller prior to
settlement are not yet known. Subsequent
disclosure of the actual amount of these post-
settlement items to be paid from settlement
funds is optional. Any amounts entered on
Lines 204209 including Seller financing
arrangements should also be entered on Lines
506509.
Instructions for the use of Lines 510
through 519 are the same as those for Lines
210 to 219 above.
Line 520 is for the total of Lines 501
through 519.
Lines 601 and 602 are summary lines for
the Seller. Enter the total in Line 420 on Line
610. Enter the total in Line 520 on Line 602.
Line 603 must indicate either the cash
required to be paid to the Seller at settlement
(the usual case in a purchase transaction), or
the cash payable by the Seller at settlement.
Subtract Line 602 from Line 601 and enter
the amount of cash due to or from the Seller
at settlement on Line 603. The appropriate
box should be checked.
Section L. Settlement Charges.
Line 700 is used to enter the sales
commission charged by the sales agent or real
estate broker.
Lines 701702 are to be used to state the
split of the commission where the settlement
agent disburses portions of the commission
to two or more sales agents or real estate
brokers.
Line 703 is used to enter the amount of
sales commission disbursed at settlement. If
the sales agent or real estate broker is
retaining a part of the deposit against the
sales price (earnest money) to apply towards
the sales agent's or real estate broker's
commission, include in Line 703 only that
part of the commission being disbursed at
settlement and insert a note on Line 704
indicating the amount the sales agent or real
estate broker is retaining as a ``P.O.C.'' item.
Line 704 may be used for additional
charges made by the sales agent or real estate
broker, or for a sales commission charged to
the Borrower, which will be disbursed by the
settlement agent.
Line 801 is used to record ``Our origination
charge,'' which includes all charges received
by the loan originator, except any charge for
the specific interest rate chosen (points). This
number must not be listed in either the
buyer's or seller's column. The amount
shown in Line 801 must include any
amounts received for origination services,
including administrative and processing
services, performed by or on behalf of the
loan originator.
Line 802 is used to record ``Your credit or
charge (points) for the specific interest rate
chosen,'' which states the charge or credit
adjustment as applied to ``Our origination
charge,'' if applicable. This number must not
be listed in either column or shown on page
one of the HUD1.
For a mortgage broker originating a loan in
its own name, the amount shown on Line 802
will be the difference between the initial loan
amount and the total payment to the
mortgage broker from the lender. The total
payment to the mortgage broker will be the
sum of the price paid for the loan by the
lender and any other payments to the
mortgage broker from the lender, including
any payments based on the loan amount or
loan terms, and any flat rate payments. For
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a mortgage broker originating a loan in
another entity's name, the amount shown on
Line 802 will be the sum of all payments to
the mortgage broker from the lender,
including any payments based on the loan
amount or loan terms, and any flat rate
payments.
In either case, when the amount paid to the
mortgage broker exceeds the initial loan
amount, there is a credit to the borrower and
it is entered as a negative amount. When the
initial loan amount exceeds the amount paid
to the mortgage broker, there is a charge to
the borrower and it is entered as a positive
amount. For a lender, the amount shown on
Line 802 may include any credit or charge
(points) to the Borrower.
Line 803 is used to record ``Your adjusted
origination charges,'' which states the net
amount of the loan origination charges, the
sum of the amounts shown in Lines 801 and
802. This amount must be listed in the
columns as either a positive number (for
example, where the origination charge shown
in Line 801 exceeds any credit for the interest
rate shown in Line 802 or where there is an
origination charge in Line 801 and a charge
for the interest rate (points) is shown on Line
802) or as a negative number (for example,
where the credit for the interest rate shown
in Line 802 exceeds the origination charges
shown in Line 801).
In the case of ``no cost'' loans, where ``no
cost'' refers only to the loan originator's fees,
the amounts shown in Lines 801 and 802
should offset, so that the charge shown on
Line 803 is zero. Where ``no cost'' includes
third party settlement services, the credit
shown in Line 802 will more than offset the
amount shown in Line 801. The amount
shown in Line 803 will be a negative number
to offset the settlement charges paid
indirectly through the loan originator.
Lines 804808 may be used to record each
of the ``Required services that we select.''
Each settlement service provider must be
identified by name and the amount paid
recorded either inside the columns or as paid
to the provider outside closing (``P.O.C.''), as
described in the General Instructions.
Line 804 is used to record the appraisal fee.
Line 805 is used to record the fee for all
credit reports.
Line 806 is used to record the fee for any
tax service.
Line 807 is used to record any flood
certification fee.
Lines 808 and additional sequentially
numbered lines, as needed, are used to
record other third party services required by
the loan originator. These Lines may also be
used to record other required disclosures
from the loan originator. Any such
disclosures must be listed outside the
columns.
Lines 901904. This series is used to
record the items which the Lender requires
to be paid at the time of settlement, but
which are not necessarily paid to the lender
(e.g., FHA mortgage insurance premium),
other than reserves collected by the Lender
and recorded in the 1000-series.
Line 901 is used if interest is collected at
settlement for a part of a month or other
period between settlement and the date from
which interest will be collected with the first
regular monthly payment. Enter that amount
here and include the per diem charges. If
such interest is not collected until the first
regular monthly payment, no entry should be
made on Line 901.
Line 902 is used for mortgage insurance
premiums due and payable at settlement,
including any monthly amounts due at
settlement and any upfront mortgage
insurance premium, but not including any
reserves collected by the Lender and
recorded in the 1000-series. If a lump sum
mortgage insurance premium paid at
settlement is included on Line 902, a note
should indicate that the premium is for the
life of the loan.
Line 903 is used for homeowner's
insurance premiums that the Lender requires
to be paid at the time of settlement, except
reserves collected by the Lender and
recorded in the 1000-series.
Lines 904 and additional sequentially
numbered lines are used to list additional
items required by the Lender (except for
reserves collected by the Lender and
recorded in the 1000-series), including
premiums for flood or other insurance. These
lines are also used to list amounts paid at
settlement for insurance not required by the
Lender.
Lines 10001007. This series is used for
amounts collected by the Lender from the
Borrower and held in an account for the
future payment of the obligations listed as
they fall due. Include the time period
(number of months) and the monthly
assessment. In many jurisdictions this is
referred to as an ``escrow'', ``impound'', or
``trust'' account. In addition to the property
taxes and insurance listed, some Lenders
may require reserves for flood insurance,
condominium owners' association
assessments, etc. The amount in line 1001
must be listed in the columns, and the
itemizations in lines 1002 through 1007 must
be listed outside the columns.
After itemizing individual deposits in the
1000 series, the servicer shall make an
adjustment based on aggregate accounting.
This adjustment equals the difference
between the deposit required under aggregate
accounting and the sum of the itemized
deposits. The computation steps for aggregate
accounting are set out in 24 CFR
§ 3500.17(d). The adjustment will always be
a negative number or zero (-0-), except for
amounts due to rounding. The settlement
agent shall enter the aggregate adjustment
amount outside the columns on a final line
of the 1000 series of the HUD1 or HUD1A
statement. Appendix E to this part sets out
an example of aggregate analysis.
Lines 11001108. This series covers title
charges and charges by attorneys and closing
or settlement agents. The title charges
include a variety of services performed by
title companies or others, and include fees
directly related to the transfer of title (title
examination, title search, document
preparation), fees for title insurance, and fees
for conducting the closing. The legal charges
include fees for attorneys representing the
lender, seller, or borrower, and any attorney
preparing title work. The series also includes
any settlement, notary, and delivery fees
related to the services covered in this series.
Disbursements to third parties must be
broken out in the appropriate lines or in
blank lines in the series, and amounts paid
to these third parties must be shown outside
of the columns if included in Line 1101.
Charges not included in Line 1101 must be
listed in the columns.
Line 1101 is used to record the total for the
category of ``Title services and lender's title
insurance.'' This amount must be listed in
the columns.
Line 1102 is used to record the settlement
or closing fee.
Line 1103 is used to record the charges for
the owner's title insurance and related
endorsements. This amount must be listed in
the columns.
Line 1104 is used to record the lender's
title insurance premium and related
endorsements.
Line 1105 is used to record the amount of
the lender's title policy limit. This amount is
recorded outside of the columns.
Line 1106 is used to record the amount of
the owner's title policy limit. This amount is
recorded outside of the columns.
Line 1107 is used to record the amount of
the total title insurance premium, including
endorsements, that is retained by the title
agent. This amount is recorded outside of the
columns.
Line 1108 used to record the amount of the
total title insurance premium, including
endorsements, that is retained by the title
underwriter. This amount is recorded outside
of the columns.
Additional sequentially numbered lines in
the 1100-series may be used to itemize title
charges paid to other third parties, as
identified by name and type of service
provided.
Lines 12001206. This series covers
government recording and transfer charges.
Charges paid by the borrower must be listed
in the columns as described for lines 1201
and 1203, with itemizations shown outside
the columns. Any amounts that are charged
to the seller and that were not included on
the Good Faith Estimate must be listed in the
columns.
Line 1201 is used to record the total
``Government recording charges,'' and the
amount must be listed in the columns.
Line 1202 is used to record, outside of the
columns, the itemized recording charges.
Line 1203 is used to record the transfer
taxes, and the amount must be listed in the
columns.
Line 1204 is used to record, outside of the
columns, the amounts for local transfer taxes
and stamps.
Line 1205 is used to record, outside of the
columns, the amounts for State transfer taxes
and stamps.
Line 1206 and additional sequentially
numbered lines may be used to record
specific itemized third party charges for
government recording and transfer services,
but the amounts must be listed outside the
columns.
Line 1301 and additional sequentially
numbered lines must be used to record
required services that the borrower can shop
for, such as fees for survey, pest inspection,
or other similar inspections. These lines may
also be used to record additional itemized
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settlement charges that are not included in a
specific category, such as fees for structural
and environmental inspections; pre-sale
inspections of heating, plumbing or electrical
equipment; or insurance or warranty
coverage. The amounts must be listed in
either the borrower's or seller's column.
Line 1400 must state the total settlement
charges as calculated by adding the amounts
within each column.
Page 3
Comparison of Good Faith Estimate (GFE)
and HUD1/1A Charges
The comparison chart must be prepared
using the exact information and amounts
from the GFE and the actual settlement
charges shown on the HUD1/1A Settlement
Statement. The comparison chart is
comprised of three sections: ``Charges That
Cannot Increase'', ``Charges That Cannot
Increase More Than 10%'', and ``Charges
That Can Change''.
``Charges That Cannot Increase''. The
amounts shown in Blocks 1 and 2, in Line
A, and in Block 8 on the borrower's GFE
must be entered in the appropriate line in the
Good Faith Estimate column. The amounts
shown on Lines 801, 802, 803 and 1203 of
the HUD1/1A must be entered in the
corresponding line in the HUD1/1A
column. The HUD1/1A column must
include any amounts shown on page 2 of the
HUD1 in the column as paid for by the
borrower, plus any amounts that are shown
as P.O.C. by or on behalf of the borrower. If
there is a credit in Block 2 of the GFE or Line
802 of the HUD1/1A, the credit should be
entered as a negative number.
``Charges That Cannot Increase More Than
10%''. A description of each charge included
in Blocks 3 and 7 on the borrower's GFE
must be entered on separate lines in this
section, with the amount shown on the
borrower's GFE for each charge entered in the
corresponding line in the Good Faith
Estimate column. For each charge included
in Blocks 4, 5 and 6 on the borrower's GFE
for which the loan originator selected the
provider or for which the borrower selected
a provider identified by the loan originator,
a description must be entered on a separate
line in this section, with the amount shown
on the borrower's GFE for each charge
entered in the corresponding line in the Good
Faith Estimate column. The loan originator
must identify any third party settlement
services for which the borrower selected a
provider other than one identified by the
loan originator so that the settlement agent
can include those charges in the appropriate
category. Additional lines may be added if
necessary. The amounts shown on the HUD
1/1A for each line must be entered in the
HUD1/1A column next to the corresponding
charge from the GFE, along with the
appropriate HUD1/1A line number. The
HUD1/1A column must include any
amounts shown on page 2 of the HUD1 in
the column as paid for by the borrower, plus
any amounts that are shown as P.O.C. by or
on behalf of the borrower.
The amounts shown in the Good Faith
Estimate and HUD1/1A columns for this
section must be separately totaled and
entered in the designated line. If the total for
the HUD1/1A column is greater than the
total for the Good Faith Estimate column,
then the amount of the increase must be
entered both as a dollar amount and as a
percentage increase in the appropriate line.
``Charges That Can Change''. The amounts
shown in Blocks 9, 10 and 11 on the
borrower's GFE must be entered in the
appropriate line in the Good Faith Estimate
column. Any third party settlement services
for which the borrower selected a provider
other than one identified by the loan
originator must also be included in this
section. The amounts shown on the HUD1/
1A for each charge in this section must be
entered in the corresponding line in the
HUD1/1A column, along with the
appropriate HUD1/1A line number. The
HUD1/1A column must include any
amounts shown on page 2 of the HUD1 in
the column as paid for by the borrower, plus
any amounts that are shown as P.O.C. by or
on behalf of the borrower. Additional lines
may be added if necessary.
Loan Terms
This section must be completed in
accordance with the information and
instructions provided by the lender. The
lender must provide this information in a
format that permits the settlement agent to
simply enter the necessary information in the
appropriate spaces, without the settlement
agent having to refer to the loan documents
themselves.
Instructions for Completing HUD1A
Note: The HUD1A is an optional form that
may be used for refinancing and subordinate-
lien federally related mortgage loans, as well
as for any other one-party transaction that
does not involve the transfer of title to
residential real property. The HUD1 form
may also be used for such transactions, by
utilizing the borrower's side of the HUD1
and following the relevant parts of the
instructions as set forth above. The use of
either the HUD1 or HUD1A is not
mandatory for open-end lines of credit
(home-equity plans), as long as the
provisions of Regulation Z are followed.
Background
The HUD1A settlement statement is to be
used as a statement of actual charges and
adjustments to be given to the borrower at
settlement, as defined in this part. The
instructions for completion of the HUD1A
are for the benefit of the settlement agent
who prepares the statement; the instructions
are not a part of the statement and need not
be transmitted to the borrower. There is no
objection to using the HUD1A in
transactions in which it is not required, and
its use in open-end lines of credit
transactions (home-equity plans) is
encouraged. It may not be used as a
substitute for a HUD1 in any transaction
that has a seller.
Refer to the ``definitions'' section (§ 3500.2)
of 24 CFR part 3500 (Regulation X) for
specific definitions of terms used in these
instructions.
General Instructions
Information and amounts may be filled in
by typewriter, hand printing, computer
printing, or any other method producing
clear and legible results. Refer to 24 CFR
3500.9 regarding rules for reproduction of the
HUD1A. Additional pages may be attached
to the HUD1A for the inclusion of
customary recitals and information used
locally for settlements or if there are
insufficient lines on the HUD1A. The
settlement agent shall complete the HUD1A
in accordance with the instructions for the
HUD1 to the extent possible, including the
instructions for disclosing items paid outside
closing and for no cost loans.
Blank lines are provided in Section L for
any additional settlement charges. Blank
lines are also provided in Section M for
recipients of all or portions of the loan
proceeds. The names of the recipients of the
settlement charges in Section L and the
names of the recipients of the loan proceeds
in Section M should be set forth on the blank
lines.
Line-Item Instructions
Page 1
The identification information at the top of
the HUD1A should be completed as follows:
The borrower's name and address is
entered in the space provided. If the property
securing the loan is different from the
borrower's address, the address or other
location information on the property should
be entered in the space provided. The loan
number is the lender's identification number
for the loan. The settlement date is the date
of settlement in accordance with 24 CFR
3500.2, not the end of any applicable
rescission period. The name and address of
the lender should be entered in the space
provided.
Section L. Settlement Charges. This section
of the HUD1A is similar to Section L of the
HUD1, with minor changes or omissions,
including deletion of lines 700 through 704,
relating to real estate broker commissions.
The instructions for Section L in the HUD
1, should be followed insofar as possible.
Inapplicable charges should be ignored, as
should any instructions regarding seller
items.
Line 1400 in the HUD1A is for the total
settlement charges charged to the borrower.
Enter this total on line 1601. This total
should include Section L amounts from
additional pages, if any are attached to this
HUD1A.
Section M. Disbursement to Others. This
section is used to list payees, other than the
borrower, of all or portions of the loan
proceeds (including the lender, if the loan is
paying off a prior loan made by the same
lender), when the payee will be paid directly
out of the settlement proceeds. It is not used
to list payees of settlement charges, nor to list
funds disbursed directly to the borrower,
even if the lender knows the borrower's
intended use of the funds.
For example, in a refinancing transaction,
the loan proceeds are used to pay off an
existing loan. The name of the lender for the
loan being paid off and the pay-off balance
would be entered in Section M. In a home
improvement transaction when the proceeds
are to be paid to the home improvement
contractor, the name of the contractor and the
amount paid to the contractor would be
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Federal Register / Vol. 73, No. 222 / Monday, November 17, 2008 / Rules and Regulations
entered in Section M. In a consolidation loan,
or when part of the loan proceeds is used to
pay off other creditors, the name of each
creditor and the amount paid to that creditor
would be entered in Section M. If the
proceeds are to be given directly to the
borrower and the borrower will use the
proceeds to pay off existing obligations, this
would not be reflected in Section M.
Section N. Net Settlement. Line 1600
normally sets forth the principal amount of
the loan as it appears on the related note for
this loan. In the event this form is used for
an open-ended home equity line whose
approved amount is greater than the initial
amount advanced at settlement, the amount
shown on Line 1600 will be the loan amount
advanced at settlement. Line 1601 is used for
all settlement charges that both are included
in the totals for lines 1400 and 1602, and are
not financed as part of the principal amount
of the loan. This is the amount normally
received by the lender from the borrower at
settlement, which would occur when some or
all of the settlement charges were paid in
cash by the borrower at settlement, instead of
being financed as part of the principal
amount of the loan. Failure to include any
such amount in line 1601 will result in an
error in the amount calculated on line 1604.
Items paid outside of closing (P.O.C.) should
not be included in Line 1601.
Line 1602 is the total amount from line
1400.
Line 1603 is the total amount from line
1520.
Line 1604 is the amount disbursed to the
borrower. This is determined by adding
together the amounts for lines 1600 and 1601,
and then subtracting any amounts listed on
lines 1602 and 1603.
Page 2
This section of the HUD1A is similar to
page 3 of the HUD1. The instructions for
page 3 of the HUD1, should be followed
insofar as possible. The HUD1/1A Column
should include any amounts shown on page
1 of the HUD1A in the column as paid for
by the borrower, plus any amounts that are
shown as P.O.C. by the borrower.
Inapplicable charges should be ignored.
BILLING CODE 421067P
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Official Instructions
