what’s in a HUD? or, secrets of the RESPA…

The HUD, the RESPA–by any other name, the settlement statement

My long-delayed Jamesburg listing is finally closing this Friday, so I just sent my seller a blank HUD to get her acquainted with the form. She will of course get the final HUD form at closing from her buyer’s attorney.

What we call “the HUD” is really form HUD-1, the Uniform Settlement Statement, published by the US Department of Housing and Urban Development. It’s also known as the RESPA form, for the federal act that requires it. It’s an accounting of the entire real estate transaction in plain language from the perspective of both buyer and seller.

A new HUD-1 form in 2011 checks loan costs against the Good Faith Estimate

HUD logo

HUD logo

Just last year a new HUD-1 was published, and the document is now three pages long instead of two. The new third page of the HUD pertains to what is called the Good Faith Estimate, or GFE. The GFE itemizes all the fees and costs associated with a mortgage.

Lenders must provide a GFE within three days of a buyer’s application for a loan. The third page of the HUD now shows the final loan costs against the original GFE, to make sure they are within ten percent of the original estimates as the law now requires.

Click here to view the new (2011) HUD-1 form.

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