4.3 The HUD-1 Settlement Statement (Legacy)

What the HUD-1 Was

The HUD-1 Settlement Statement was the standardized, itemized closing-cost form required under RESPA (the Real Estate Settlement Procedures Act). For decades it was the document every borrower reviewed at closing to see the full accounting of the transaction — loan fees, title charges, taxes, escrow deposits, and the final cash to close.

Under the TILA-RESPA Integrated Disclosure (TRID) rule, the HUD-1 was replaced by the Closing Disclosure for most consumer mortgage loans whose applications were received on or after October 3, 2015. The CD consolidated the old final TIL disclosure and the HUD-1 into a single, consumer-friendly form.

When the HUD-1 Still Appears

The HUD-1 did not disappear entirely. It still appears in transactions that fall outside TRID's scope:

• Non-consumer (commercial and investment) transactions — loans for business or investment property are not consumer mortgages, so TRID does not apply.
• Certain reverse mortgages — some Home Equity Conversion Mortgage (HECM) and proprietary reverse-mortgage transactions still use the HUD-1.
• Some loans not secured by real estate or otherwise exempt from TRID.

Because these transactions remain common, an NSA may still be handed a HUD-1 at the signing table and must be able to recognize and present it correctly.

Structure of the HUD-1

The HUD-1 is organized into three pages, with separate borrower and seller columns. On a refinance, there is no seller, so the seller column is left blank.

Page 1 — Summary of Borrower's and Seller's Transactions

• Sections 100–300 (Section J, borrower): 100 = gross amount due from borrower (totaled on Line 120), 200 = amounts paid by or on behalf of the borrower (totaled on Line 220), 300 = cash at settlement, with Line 303 the bottom-line cash from or to the borrower.
• Sections 400–600 (Section K, seller): 400 = gross amount due to seller (Line 420), 500 = reductions in the amount due to seller (Line 520), 600 = cash at settlement, with Line 603 the bottom-line cash to or from the seller.

A common exam trap: Lines 120 and 420 are gross subtotals, not the cash the party actually brings or receives. The cash figures are 303 (borrower) and 603 (seller).

Page 2 — Settlement Charges (Itemized)

• Sections 700–1400: itemized charges — real estate broker fees (700), items payable in connection with the loan (800: origination, points, appraisal, credit report), items the lender requires paid in advance (900), reserves deposited with the lender (1000), title charges including both owner's and lender's title insurance (1100), government recording and transfer charges (1200), additional settlement charges (1300), and the total on Line 1400.

Page 3 — Comparison of Good Faith Estimate (GFE) and Final Charges

• A side-by-side comparison of the GFE figures to the final HUD-1 figures, plus a summary of the loan terms.

Reading the HUD-1 Line Numbers

The HUD-1's line numbering is the key to navigating it quickly. Title companies and lenders refer to charges by line number, so an NSA who recognizes the numbering can follow the conversation even if the borrower cannot.

These are the line numbers on the 2010 RESPA-revised HUD-1, the version in use until the CD replaced it:

• Lines 700–704 — total real estate broker fees and the division of commission (split between borrower and seller columns on a purchase).
• Lines 800–807+ — items payable in connection with the loan: 801 "Our origination charge," 802 "Your credit or charge (points) for the specific interest rate chosen," 803 "Your adjusted origination charges" (801 + 802), 804 appraisal fee, 805 credit report, 806 tax service, 807 flood certification. Lines 808 and up hold other lender-required third-party services.
• Lines 900–905 — items required by the lender to be paid in advance (daily interest, mortgage insurance, homeowner's insurance).
• Lines 1000–1009 — reserves deposited with the lender (the initial escrow for taxes and insurance).
• Lines 1100–1108+ — title charges: 1101 "Title services and lender's title insurance," 1102 settlement or closing fee, 1103 owner's title insurance, 1104 lender's title insurance, 1105/1106 the lender's and owner's policy limits.
• Lines 1200–1206 — government recording and transfer charges: 1201 government recording charges, 1203 transfer taxes.
• Lines 1300–1306 — additional settlement charges (pest inspection, survey, etc.), with Line 1400 the total settlement charges.

Two numbering traps: the appraisal fee is 804, not 803 (803 is the adjusted origination charge subtotal), and the lender's title insurance lives in the 1100 series, not the 800s. Notary fees, incidentally, are part of "title services" on Line 1101.

Even though the CD has replaced the HUD-1 for consumer loans, many title and escrow professionals still speak in HUD-1 line numbers, so an NSA working commercial or reverse-mortgage closings benefits from knowing them.

Borrower and Seller Columns

Page 1 of the HUD-1 is split into two columns — one for the borrower and one for the seller. On a refinance with no seller, the seller column is left blank. On a purchase, both columns are populated, and each side pays its own costs per the contract:

• Borrower's column (left): shows the gross amount due from the borrower (subtotal Line 120), items already paid by or on behalf of the borrower (subtotal Line 220), and the final cash at settlement the borrower brings or receives on Line 303.
• Seller's column (right): mirrors the structure — gross amount due to the seller (Line 420), reductions (Line 520), and the cash to or from the seller on Line 603.

Page 3 includes the side-by-side comparison of the Good Faith Estimate (GFE) figures (column one) against the final HUD-1 figures (column two), plus a summary of the loan terms — loan amount, term, introductory rate (for ARMs), and whether the balance can increase. This comparison is the precursor of the CD's APR/TIP disclosures on page 5.

Why NSAs Still Must Recognize the HUD-1

Even though the CD governs consumer-mortgage signings from applications taken on or after October 3, 2015, the NSA certification exam still tests the HUD-1 because it remains in active use for:

• Commercial and investment-property closings (loans not subject to TRID).
• Certain reverse-mortgage transactions (HECM loans follow HUD rules, and some still use the HUD-1).
• Assumptions and modifications of older pre-TRID loans, where the original HUD-1 may be referenced.
• Foreclosure and short-sale files, where the HUD-1 is the historical record of the original closing costs.

An NSA who cannot recognize a HUD-1 may mistakenly try to notarize it, mishandle the borrower/seller columns, or fail to find the signature lines. Recognizing the form — even when you do not explain it — is part of professional competence.

Notarization and the NSA's Role

The HUD-1 is NOT notarized. Like the CD, it is an itemized accounting that the borrower signs to acknowledge the figures, not to make a sworn statement. The NSA's role is the same as with the CD:

1. Verify the borrower's name matches the rest of the package.
2. Point to the signature line on page 1 (and page 3, if required).
3. Do not explain any charge, credit, or line item — direct questions to the lender or settlement agent.

HUD-1 vs. Closing Disclosure at a Glance