WHAT IS A HUD-1 SETTLEMENT OR HUD-1 CLOSING STATEMENT?
In 1974 the United States Congress passed the Real Estate Settlement Procedures Act (RESPA), as a consumer protection statute. RESPA’s main purpose is to help consumers become better shoppers for settlement services and to eliminate kickbacks and referrals fees that unnecessarily increase the costs of your real estate closing settlement services. In accordance with RESPA, the Department of Housing and Urban Development (HUD) promulgated a uniform settlement statement, now commonly referred to as the HUD-1 Settlement Statement or HUD-1 Closing Statement. The HUD-1 Settlement Statement is the financial picture of the closing. All money flowing into and out of settlement and/or title company appears on the form. “Buyers” are referred to as “Borrowers” on this form even though it may be used when there is no loan involved, such as in a cash transaction. Closing Costs or Fees associated with the transaction, but paid prior to closing, are also included on the HUD. They are normally marked “
