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Understanding the HUD-1 Settlement Statement

The Settlement Statement is the financial picture of the closing, used for cash closings, commercial property closings or investment property closings.

The Settlement Statement is prepared by the closing agent and shows a detailed itemization of all the costs pertaining to the transaction. All money deposited into the escrow account and the disbursals out of the escrow account must appear on the form.


Be aware that "Buyers" are referred to as "Borrowers" on the HUD-1 form even though it may be used when there is no loan involved, such as in a cash transaction. For better clarity, we will simply reference "buyers" and "sellers" as appropriate.


A breakdown explanation of the 2010 HUD-1 Settlement Statement follows:


Page 1 - Shows the summary of the transaction.


Page 2 - Shows the details of most of the closing costs for the transaction,


Page 1 of the HUD-1 Settlement Statement


These sections contain the basic reference information about the transaction


Section A - Settlement Statement (HUD-1)


Section B - Type of Loan, File Number, Loan Number and Mortgage Insurance Case Number


Section C - Contains the following explanation of this form:

Note: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked "(p.o.c.)" were paid outside the closing; they are shown here for informational purposes and are not included in the totals.


Section D – Name and address of Buyer/Borrower


Section E - Name and address of Seller


Section F - Name and address of Lender


Section G - Property Location – includes brief legal description and property address


Section H - Settlement Agent Name and Address – and Place of Settlement


Section I - Settlement/Closing Date and/or Funding Date


The bottom portion of page 1 is divided into two columns:


Section J and Section K - These two sections give the financial summary of the transaction. Section J is the summary of the Buyers transaction and Section K is the summary of the Sellers transaction.


Section J - Buyer's summary of the transaction


The Buyer's summary of the transaction is further broken down into numbered sections:


Section 100 – Buyer’s debits


Section 200 – Buyer’s credits


Section 300 – Buyer’s totals


Section 100 - Gross Amount Due from Borrower - Shows what the Buyer owes or the debits, such as the purchase price of the home and the costs associated with the purchase.


Line 101 - Contract Sales Price


Line 102 - Personal Property, if any


Line 103 - Settlement Charges to borrower - Reflects the settlement charges paid by the Buyer, which are itemized on Page 2 of the Settlement Statement and carried over from Line 1400.


Line 104-105 - Additional lines to be used for any other amounts due from Buyer, that is not shown on the 2nd page of the HUD.


Line 106, 107, etc - Adjustments for items paid by seller in advance or miscellaneous charges not shown on Page 2.


Line 120 - Gross Amount Due from Borrower - Total of what the Buyer owes, including all charges as carried over to line 103 from the 2nd page of the Settlement Statement.


Section 200 - Amounts Paid by Or in Behalf of Buyer – This is the credits to Buyer, such as:


Line 201 - Earnest money deposit made by Buyer


Line 202 - The loan amount


Line 203- 209, etc. - Any money owed to the Buyer by the Seller at time of closing, such as tax prorations from the Seller, Seller-paid closing costs for Buyer, etc.. Also any lender credits to buyer for funds deposited, etc.


Line 210-211 – Property Tax and assessment proration credits to buyer from seller.


Line 212-219, etc. – Any additional credits to buyer from sellers or other sources.


Section 300 - Is the totals of Line 120 and Line 220 carried to the bottom of the page


Line 301 - Is the same as Line 120.


Line 302 - Is the same as Line 220.


Line 303 - Is the total "cash" due from the Buyer at closing or in some cases Cash to Buyer. The buyer is expected to bring a cashier's check to closing, or wire that amount to the Escrow Disbursement account of the Settlement Agent at or before the closing.


Section K – Seller's Summary of Transaction


The Seller's summary of the transaction is further broken down into numbered sections.


Section 400 - Seller’s credits


Section 500 - Seller’s debits


Section 600 - Totals


Section 400 - Gross Amount Due to Seller - Reflects the credits due the Seller at closing:


Line 401 - Contract sales price


Line 402 - Personal Property


Line 403-405 - Additional lines to be used for any other amounts to be credited to Seller and any money owed to the seller by the buyer.


Line 406-416, etc. - Adjustments from Buyer for items paid by seller in advance, which could include prepaid taxes or homeowners association dues, etc.


Line 420 - Shows the total credits due to the Seller at closing.


Section 500 - Reflects the charges or debits of the Seller.


Line 501 - Excess Deposits, which would include any earnest money received from buyer directly paid to seller.


Line 502 - Reflects the settlement charges paid by the Seller, which are itemized on Page 2 of the Settlement Statement and carried over from Line 1400.


Lines 503-509, etc. -Usually reflect the full payment amounts or partial release amounts of any mortgage loans or other liens still owed and encumbering the property. This would also include any seller-paid closing costs for buyer and any agreed splits of closing costs.


Lines 510-519, etc. – Adjustments for items unpaid by seller, which would include proration of property taxes and assessments, and rents or security deposits, or miscellaneous items to be charged to the seller and credited to the buyer, etc.


Line 520 - Total debits due from the Seller at closing.


Section 600 - Is the totals of Line 420 and 520 carried down to the bottom of the form.


Line 601 - Same as Line 420


Line 602 - Same as Line 520


Line 603 - The total "cash" due to the Seller at closing. This total cash due to the seller is often referred to as the “Sale proceeds.” If the seller would need to bring money in to close, this would be Cash from Seller. In that case, the seller is expected to bring a cashier's check to closing, or wire that amount to the Escrow Disbursement account of the Settlement Agent at or before the closing.


Page 2 of the HUD-1 Settlement Statement


This page of the settlement statement contains


Section L - Settlement Charges


Separate Buyer and Seller columns.


The Buyer's column is the 2nd column – the inner column


The Seller's column is the 3rd column – the outer column


Section L is further divided into numbered Sections 700 through 1300, and ends with Line 1400.


Section 700 - Total Real Estate Broker Fees - Amount of commission to be paid to the real estate brokers and any Brokerage/Administrative Fees to real estate brokers.


Section 800 - Items payable in connection with Loan - Discloses all loan-related costs such as origination fees and discount points, etc. This would also include appraisal fees, credit report fees and any other costs associated with the loan that are required by the lender that are provided by outside parties.


Section 900 - Items Required by Lender to be Paid in Advance - Items that the Lender requires be paid in advance, such as preliminary interest or the first year’s hazard insurance premium and any upfront mortgage insurance that lender may require for your type of loan.


Section 1000 - Reserves Deposited with Lender - Items that are required by the lender to be held in escrow, such as deposits for taxes and insurance. The lender will collect and hold these amounts for payment of future bills.


Section 1100 - Title Charges - Title insurance costs and related charges for the closing services provided. These are charges payable to the title company, settlement agent, and/or their representatives. This section shows the actual premium charged for the title insurance and the amount of policy coverage provided.


Section 1200 - Government Recording and Transfer Charges - The county recording fees and any transfer taxes owed for any Deeds to be recorded in the transaction.


Section 1300 - Additional Settlement Charges – Any additional settlement charges, such as survey or pest inspection fees that do not specifically belong in the aforementioned sections.


Line 1400 - Total Settlement Charges - The total of charges for the Buyer and the Seller.


Buyer Total - Carried over to Page 1, Line 103.


Seller Total - Carried over to Page 1, Line 502.


Once you are satisfied that the information shown on the HUD-1 Settlement Statement is complete and accurate, you will be asked to sign the statement, indicating your approval for the disbursement of funds in connection with the transaction. The Settlement Agent will also sign the HUD-1, certifying that the information shown is accurate and that disbursement of the funds will be made in accordance with the Statement.

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