Settlement costs and the HUD

Settlement Costs and HUD1

The Settlement Cost which is reported at the closing on a "HUD1" or "Settlement Statement" has for the most part was replaced by the "Closing Disclosure" or "CD" on October 3rd 2015 when TRID took effect in the lending industry. "TRID" is the merger of documents supposedly designed to help the consumer better understand the cost associated with their mortgage loan. TRID = Truth In Lending RESPA Integrated Disclosure.

Under TRID the Closing Disclosure is in reality the final Loan Estimate or "LE" the borrower will receive three days prior to closing. This is now being used in place of the "HUD1" on primary and secondary residential properties whether a purchase or a refinance. The HUD1 can still be used for other types of real estate purchases such as investment properties purchased by a corporation or LLC, land purchases, and commercial properties. However you are more than likely to still see the creditor or title companies provide you with a CD versus a HUD1 simply because all or most of the creditors and title companies have now changed over their software programs to use only the LE.

Both the HUD1 and Closing Disclosure list all the final cost one could expect to pay associated with the mortgage loan whether a purchase or refinance. Both forms contain any fees that have been paid by the buyer or seller for purchases on the buyer's behalf.

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