Don’t Get Burned, Go Over Your HUD-1 Closely
July 7, 2008 by Danilo Bogdanovic
Filed under Buyer Resources
Home buyers – don’t get burned! Make sure that anything your lender, agent/broker or the seller promises you is listed on the HUD-1 Settlement Statement at closing so it’s actually credited it to you. Once you sign off on the HUD-1 and leave the title company’s office, you may be stuck not ever receiving the credit.
If there is a chance you can get the credit after closing, you’ll have to jump through major hoops to say the least. The main reason why is because the general rule of thumb in real estate is that if it’s not in writing, it’s not enforceable (check with a lawyer for professional guidance).
For example…
I had a closing last Monday in which my buyer clients almost signed off on the HUD-1 Settlement Statement without noticing that the credit of $1073.00 promised to them by the lender was not there. Luckily, the buyers made a mention of the credit to the settlement agent and I and we all realized that the credit was not on the HUD-1.
We immediately called the loan officer to get updated loan docs sent over showing a credit for $1073.00. We then made the change on the HUD-1 and the buyers received the credit as promised. Had we not noticed before leaving the title company’s office, they would have paid $1073.00 more than they should have.
***Tip: Tell your buyer’s agent about any and all agreements or credits you and your lender talked about/been promised. Your agent goes to settlements all the time and knows what/where to look for these kinds of things. If you tell your buyer’s agent about it, they will be able to find it on the HUD-1 or realize it’s not there right away. Your buyer’s agent could save you from losing that money if you miss the mistake yourself.
Tom Vanderwell on Mon, 7th Jul 2008 10:34 pm
Danilo,
Well said. The other thing I’d recommend is working with a lender who makes sure that he goes over all of the numbers with the buyers before closing. That eliminates the last minute issues because any of those type of things can get taken care of earlier. I try to attend 100% of my closings that are within driving distance and the once I can’t, I make sure that I’m available by phone in case there are questions.
Keep up the good work and if I can help, let me know.
Thanks!
Tom Vanderwell
(616) 292-7559
Danilo Bogdanovic on Mon, 7th Jul 2008 10:49 pm
Tom – Thanks. Your recommendation is excellent. Unfortunately, many consumers tend to just focus on getting “the best rate”. I try to stress the importance of working with an honest lender with a proven track record and a high level of service, but it’s up to the consumer in the end.
As far as attending closings, few lenders around here do so. Though I think it’s a great idea, I can’t knock the lenders who don’t because the lender I work with a lot doesn’t make it to closings. But he’s honest and gets everything out in the open ahead of time. And he and his assistant are always just a phone call away should anything come up at settlement.
Thanks again and appreciate the offer!