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HUD - 1A is an optional form that
may be used for refinancing and subordinate lien federally related
mortgage loans, as well as for any other one-party transaction that
does not involve the transfer of title to residential real property.
The HUD - 1 form may also be used for such transactions, by utilizing
the borrower's side of the HUD - 1 and following the relevant parts of
the instructions as set forth above. The use of either the HUD - 1 or
HUD - 1A is not mandatory for open-end lines of credit (home-equity
plans), as long as the provisions of Regulation Z are followed.
The HUD-1A
settlement statement is to be used as a statement of actual charges
and adjustments to be given to the borrower at settlement, as defined
in this part. The instructions are not a part of the statement and
need not be transmitted to the borrower. There is no objection to
using the HUD-1A in transactions in which it is not required, and its
use in open-end lines of credit transactions (home-equity plans) is
encouraged. It may not be used as a substitute for a HUD-1 in any
transaction in which there is a transfer of title and a first lien is
taken as security.
Information and amounts may be
filled in by typewriter, hand printing, computer printing, or any
other method producing clear and legible results. Refer to 3500.9
regarding rules for reproduction of the HUD - 1A. Additional pages may
be attached to the HUD - 1A for the inclusion of customary recitals
and information used locally for settlements or if there are
insufficient lines on the HUD - 1A.
The settlement agent shall
complete the HUD - 1A to itemize all charges imposed upon the borrower
by the lender, whether to be paid at settlement or outside of
settlement, and any other charges that the borrower will pay for at
settlement. In the case of ``no cost'' or ``no point'' loans, these
charges include any payments the lender will make to affiliated or
independent settlement service providers relating to this settlement.
These charges shall be included on the HUD - 1A, but marked ``P.O.C.''
for ``paid outside of closing,'' and shall not be used in computing
totals. Such charges also include indirect payments or back-funded
payments to mortgage brokers that arise from the settlement
transaction. When used, ``P.O.C.'' should be placed in the appropriate
lines next to the identified item, not in the columns themselves.
Blank lines are provided in
Section L for any additional settlement charges. Blank lines are also
provided in Section M for recipients of all or portions of the loan
proceeds. The names of the recipients of the settlement charges in
Section L and the names of the recipients of the loan proceeds in
Section M should be set forth on the blank lines. Line Item
Instructions for HUD - 1A The identification information at the top of
the HUD - 1A should be completed as follows:
The borrower's name and address
is entered in the space provided. If the property securing the loan is
different from the borrower's address, the address or other location
information on the property should be entered in the space provided.
The loan number is the lender's identification number for the loan.
The settlement date is the date of settlement in accordance with
3500.2, not the end of any applicable rescission period. The name and
address of the lender should be entered in the space provided.
Section L. Settlement Charges.
This section of the HUD - 1A is similar to Section L of the HUD - 1,
with minor changes or omissions, including deletion of lines 700
through 704, relating to real estate broker commissions. The
instructions for Section L in the HUD - 1, should be followed insofar
as possible. Inapplicable charges should be ignored, as should any
instructions regarding seller items.
Line 1400 in the HUD - 1A is for
the total settlement charges charged to the borrower. Enter this total
on line 1602 as well. This total should include Section L amounts from
additional pages, if any are attached to this HUD - 1A.
Section M. Disbursement to
Others. This section is used to list payees, other than the borrower,
of all or portions of the loan proceeds (including the lender, if the
loan is paying off a prior loan made by the same lender), when the
payee will be paid directly out of the settlement proceeds. It is not
used to list payees of settlement charges, nor to list funds disbursed
directly to the borrower, even if the lender knows the borrower's
intended use of the funds.
For example, in a refinancing
transaction, the loan proceeds are used to pay off an existing loan.
The name of the lender for the loan being paid off and the pay-off
balance would be entered in Section M. In a home improvement
transaction when the proceeds are to be paid to the home improvement
contractor, the name of the contractor and the amount paid to the
contractor would be entered in Section M. In a consolidation loan, or
when part of the loan proceeds is used to pay off other creditors, the
name of each creditor and the amount paid to that creditor would be
entered in Section M. If the proceeds are to be given directly to the
borrower and the borrower will use the proceeds to pay off existing
obligations, this would not be reflected in Section M.
Line 1602 is the total amount
from line 1400.
Line 1603 is the total amount
from line 1520.
Line 1604 is the amount disbursed
to the borrower. This is determined by adding together the amounts for
lines 1600 and 1601, and then subtracting any amounts listed on lines
1602 and 1603.
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