| How Can HUD-1 Help You Generate Business?
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| | premiums due at settlement. Escrow
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| | reserves for mortgage insurance are
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| -----------------------------------------
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| | recorded later. If your mortgage
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| HUD-1 is a standard form you use very
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| | insurance is a lump sum payment good for
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| often. The form serves not just as a
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| | the life of the loan it should be
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| settlement closing statement, but also as
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| | noted.903 Hazard insurance premiums due
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| a proof of payment of different tax
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| | at settlement. It is not used for
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| deductions. Understanding the form and
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| | insurance reserves that will go into
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| the tax deductible items and
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| | escrow.904 Miscellaneous items: flood
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| communicating them to your clients will
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| | insurance, mortgage life insurance,
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| help your clients to minimize their taxes
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| | credit life insurance and disability
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| and help you to build trust and get more
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| | insurance premiums.905 Miscellaneous
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| business exposure.What is the HUD-1
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| | items: flood insurance, mortgage life
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| -----------------HUD-1 is a form used by
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| | insurance, credit life insurance and
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| the settlement agent (closing agent) to
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| | disability insurance premiums.Section
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| itemize all incoming funds and all
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| | 1000 Reserves Deposited with
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| charges paid and accrued by a borrower
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| | Lender1001-1007 Funds used to start the
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| and seller for a real estate transaction.
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| | borrower's escrow account, from which the
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| When is the HUD-1 Issued?The Real Estate
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| | lender will pay next year's premiums.
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| Settlement Procedures Act (RESPA)
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| | Each mortgage payment includes an amount
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| requires that the form be issued in all
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| | that covers a portion of these recurring
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| real estate transactions in the United
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| | expenses.1008 Escrow adjustment
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| States which involve federally related
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| | calculated by the settlement agent by
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| mortgage loans. RESPA states you should
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| | comparing different escrow formulas to
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| be given a copy of the HUD-1 at least one
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| | assure the lender does not collect more
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| day prior to settlement.When Do Clients
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| | escrow funds than allowed.Section 1100,
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| Need HUD-1 For Taxes?
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| | Title Charges1101 Settlement agent's
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| | fee.
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| -------------------------------------Clie
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| | The fees for the abstract or title
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| nts use the information included in the
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| | search and examination are entered in
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| form when they file their annual taxes.
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| | lines1102 Abstract / title search
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| The filing deadline is normally April 15
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| | fee1103 Examination fee1104 Title
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| of every year for the proceeding year. To
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| | insurance binder (also called a
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| allow the client enough time to file
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| | commitment to insure). Payment for title
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| taxes using the HUD-1 information, it is
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| | insurance policies is entered later.1105
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| recommended that a copy of the HUD-1 will
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| | Deed preparations record charges and
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| be sent to the client in January.Because
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| | work on mortgages and notes1106 The fee
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| the real estate transaction takes place
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| | charged by a notary public for
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| during the year, usually long before
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| | authenticating the execution of the
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| filing the tax return, the HUD-1 given to
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| | settlement documents1107 Attorney's
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| the client at closing time could be lost
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| | fees.1108 Title insurance (except the
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| or misplace. Sending the client a copy of
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| | cost of the binder).1109 Informational
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| the HUD-1 with a cover letter will be
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| | lines disclosing costs for the separate
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| very helpful and time savings to the
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| | title insurance policies (Only line 1108
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| client.HUD-1 Client Sample Letter
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| | is carried forward.)1110 Informational
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| --------------------------The following
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| | lines disclosing costs for the separate
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| is a sample letter you can use to send
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| | title insurance policies (Only line 1108
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| your clients:[Date]TAX TIME IS COMINGDear
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| | is carried forward.)1111-1113 Other
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| [Client's Name]:Tax time indeed is just
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| | title-related charges which vary by
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| around the corner, and the first thing
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| | location: tax certificate fee / private
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| you will need is a copy of the Closing
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| | tax feeSection 1200, Government Recording
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| Statement on your property. Moving can
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| | and Transfer Charges1201 Recording
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| be a very busy time, and you may have
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| | fee1202 City or County recording fee1203
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| misplaced this very important document.I
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| | State recording
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| would like to be sure you avail yourself
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| | fee1204-1205 Miscellaneous recording fee
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| of all the tax advantages possible from
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| | itemsSection 1300, Survey and inspections
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| our transaction. If your accountant has
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| | fees (for pests, lead-based paint, radon,
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| any questions, please have him or her
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| | structural inspections, inspections for
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| call me (if you need a referral to an
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| | heating, plumbing, or electrical
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| accounting you can trust, I'd be happy to
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| | equipment) and home warranty.Line 1400
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| provide you with one).I look forward to
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| | Total settlement charges paid from
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| continuing as your realtor and providing
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| | borrower's and seller's funds. They are
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| you the highest level of service
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| | also entered in Sections J and K,
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| possible.Yours sincerely,[your name]Oh,
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| | lines 103 and 502.Section J, Summary of
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| by the way... If any of your friends or
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| | Borrower's TransactionSection 100, Gross
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| relatives are thinking about buying or
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| | Amount Due from BorrowerLine 101 Gross
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| selling a home, I'd love to be of service
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| | sales price of the property.Line
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| to them. So, when you think of these
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| | 102 Personal property charges (draperies,
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| people, just give me a call with their
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| | washer, dryer, outdoor furniture, and
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| name and number. I'll be happy to follow
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| | decorative items purchased from the
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| up and tend to their Real Estate
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| | seller)Line 103 Total settlement
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| needs.Which HUD-1 Information Is
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| | charges to borrower (from Line 1400
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| Important For Your Client's Taxes?The
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| | section L)Lines 104-105 Amounts owed by
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| information reported in the HUD-1 relates
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| | the borrower or previously paid by the
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| to the following tax statements and
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| | seller (include balance in the seller's
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| schedules:Tax form HUD-1 lineSchedule A
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| | escrow account if the borrower is
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| (itemized deductions), Line 10 - Annual
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| | assuming the loan and uncollected rents
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| mortgage interest deduction Line
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| | borrower may owe the seller)Lines 106-112
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| 901Schedule A (itemized deductions), Line
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| | Item paid in advance by seller (Prorated
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| 10 - Points deduction Line 802Schedule A
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| | portion of city/county taxes)Line 120
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| (itemized deductions), Line 6 - Real
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| | Gross amount due from borrower. Total
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| estate taxes deduction Line 1003,
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| | of Lines 101 through 112Section 200,
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| 1004Schedule E (rental income), Line 20 -
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| | Amounts Paid By or In Behalf of
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| Depreciation (cost of property is
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| | BorrowerLine 201 Buyer's credit for the
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| required) Line 101, 102Schedule E (rental
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| | earnest money paid when the offer was
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| income), Line 12a - Mortgage Interest
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| | accepted.Line 202 The new loan paid to
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| Deduction Line 901, 802Schedule E
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| | the borrower by the lender.Line 203 Loan
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| (rental income), Line 9 - Insurance 903,
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| | borrower assumes or takes title subject
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| 1001, 1002Schedule E (rental income),
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| | to an existing loan or lien on the
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| Line 16a - Real state taxes 1003,
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| | property.Lines 204-209 Miscellaneous
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| 1004Schedule E (rental income), Line 18 -
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| | items paid by or on behalf of the buyer
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| Other deductions 703, 801-811, 1005,
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| | (allowance the seller is making for
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| 1101-1110, 1201-3, 1301-1302Schedule D
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| | repairs or replacement of items or a note
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| (capital gain) Part I, II, Column d -
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| | seller accepts from borrower for part of
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| Sales Price 401, 402Schedule D (capital
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| | the purchase price)Lines 210-219 Bills
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| gain) - Part I, II, Column e - Cost or
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| | seller has not yet paid, but owes (taxes,
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| other basis 101, 102Form 6252
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| | assessments or rent collected in advance
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| (installment sale), Line 8 - Selling
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| | by the seller for a period extending
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| price 401, 402Form 6252 (installment
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| | beyond the settlement date)Lines 220
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| sale), Line 8 - Cost or other basis 101,
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| | Total for all items in Section 200. The
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| 102Form 4797 (sale of business property),
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| | total is added to the borrower's
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| Part I, Column d - Cost or other
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| | proceeds.
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| basis 401, 402Form 4797 (sale of business
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| | Section 300, Cash at Settlement From/To
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| property), Part I, Column f - 101,
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| | BorrowerLines 301 Summary of the total
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| 102HUD-1's two sections
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| | amount due from the borrower.Lines 302
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| --------------------Section J, Summary
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| | Summery of all items already paid by or
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| of Borrower's TransactionThis section
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| | for the borrower.Lines 303 The
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| contains 6 sections, and basically
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| | difference between lines 301 and 302
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| summarizes the entries made to the
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| | representing the amount of money the
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| section L (Settlement charges, see
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| | borrower owes at closing. If negative
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| below).- Section 100, Gross Amount Due
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| | number the borrower will receive funds
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| from Borrower- Section 200, Amounts Paid
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| | back at closing.Section K, Summary of
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| By or In Behalf of Borrower- Section 300,
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| | Seller's TransactionSection 400, Gross
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| Cash at Settlement From/To
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| | Amount Due to Seller (amounts added to
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| Borrower- Section 400, Gross Amount Due
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| | the seller's funds)Line 401 Gross sales
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| to Seller- Section 500, Reductions in
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| | price of the property.Lines 404-405
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| Amount Due to Seller- Section 600, Cash
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| | Amounts owed by the borrower or
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| at Settlement To/From SellerSection L,
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| | previously paid by the seller (escrow
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| Settlement ChargesThat's where many
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| | account's balance or uncollected
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| entries are tabulated before being
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| | rents)Lines 406-412 Items paid in
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| brought forward to page 1. Columns
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| | advance by the seller (prorated portion
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| contain charges that are paid from either
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| | of city / county taxes)line 420 is the
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| the borrower's or the seller's funds.
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| | gross amount due to the seller. Total of
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| Your closing statement probably won't
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| | Lines 401 through 412.Section 500,
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| have entries in all lines.- Section 700,
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| | Reductions in Amount Due to Seller
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| Agency Commissions- Section 800, Items
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| | (amounts are subtracted from the seller's
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| Payable in Connection with Loan- Section
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| | funds)line 501 When a third party holds
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| 900, Items Required by Lender to be Paid
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| | the borrower's earnest money deposit, and
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| in Advance- Section 1000, Reserves
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| | will pay it directly to the seller.line
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| Deposited with Lender- Section 1100,
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| | 502 Total from line 1400, the seller's
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| Title Charges- Section 1200, Government
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| | total charges as computed in Section
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| Recording and Transfer Charges- Sections
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| | L.line 503 When borrower assumes or
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| 1300 & 1400, Additional Settlement
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| | takes title subject to existing liens
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| Charges and TotalsLine By Line
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| | which are deducted from the sales
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| DescriptionSection 700, Agency
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| | price.line 504-505 First and/or second
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| Commissions701 Commissions paid to
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| | loans which will be paid-off as part of
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| real estate agencies702 Commissions
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| | settlement (including accrued
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| paid to real estate agencies
| |
| | interest).line 506-509 Miscellaneous
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| Section 800, Items Payable in Connection
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| | entriesline 506 Deposits paid by the
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| with Loan801 Processing or originating
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| | borrower to the seller or third party
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| loan fees. If the fee is a percentage of
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| | other than the settlement agentline
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| the loan amount, the percentage will be
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| | 510-519 Bills unpaid by seller (taxes,
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| stated.802 "Points" charged by the
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| | assessments or rent collected in advance
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| lender. Each point is 1% of the loan
| |
| | )line 520 Total of all items in Section
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| amount.803 Appraisal fees. If paid with
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| | 500. The total is deducted from the
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| loan application before closing, it
| |
| | seller's proceeds.Section 600, Cash at
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| should be marked "POC," (paid outside of
| |
| | Settlement To/From Sellerline line 601
|
| closing). The amount would be shown, but
| |
| | Gross amount due to the seller, from
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| would not be included in the total fees
| |
| | line 420.line 602 Total reductions in
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| you bring to settlement.804 Cost of the
| |
| | seller's proceeds, from line 520.line 603
|
| credit report if it is not included in
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| | Difference between lines 601 and 602.
|
| the Origination Fee.805 Inspections
| |
| | Cash amount paid to seller (if a negative
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| fee, done at the request of the
| |
| | number the seller owes money at
|
| lender.806 Private Mortgage Insurance
| |
| | closing)Tax USA Inc.
|
| (PMI) application fee.807 Assumption
| |
| | ------------Tax USA, Inc. is a complete
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| fee, when buyer takes over seller's
| |
| | tax, accounting and financial management
|
| existing mortgage.808 Miscellaneous items
| |
| | firm specializes in small businesses,
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| connected with the loan, such as fees
| |
| | corporations and high income individuals.
|
| paid to a mortgage
| |
| | Tax USA Inc.'s mission is to exceed
|
| broker.809 Miscellaneous items connected
| |
| | clients' expectation by providing superb
|
| with the loan, such as fees paid to a
| |
| | tax, accounting & financial Management
|
| mortgage broker.810 Miscellaneous items
| |
| | services. We offer our clients tax,
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| connected with the loan, such as fees
| |
| | accounting and bookkeeping services, CFO
|
| paid to a mortgage broker.811
| |
| | Outsourcing, Budget Review and Business
|
| Miscellaneous items connected with the
| |
| | Plans, Cash Flow Management, Payroll
|
| loan, such as fees paid to a mortgage
| |
| | Services and Entities' Incorporation.Our
|
| broker.Section 900, Items Required by
| |
| | ClientsWe focus on small and mid size
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| Lender to be Paid in Advance901 Interest
| |
| | businesses, non-profit organization and
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| collected at settlement for the time
| |
| | high income individuals. Client list
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| period between closing and the first
| |
| | comprised of corporations, non-profit
|
| monthly payment.902 Mortgage insurance
| |
| | organizations and high-tech employees.
|
