Who Is Responsible for Errors on the HUD-1 Statement? | Home Guides

Required by the Real Estate Settlement Procedures Act (RESPA), the HUD-1 settlement statement is given to buyers and sellers prior to a home’s closing. A real estate settlement agent or closing agent prepares the HUD-1, which itemizes all charges to the seller and buyer. This form is an important part of a home’s sale, so its figures must be accurate. However, certain information for a HUD-1 may come in just before the closing, so errors can occur.

Settlement Statement Preparation

Settlement agents are responsible for preparing the HUD-1 statement that’s given to home sellers and buyers.These agents may be attorneys, real estate brokers, lender employees, mortgage brokers or title-company employees. Regardless of who the particular settlement agent is, a HUD-1 goes through several layers of review prior to a home’s closing. Settlement agents are also responsible for making necessary corrections when errors on a HUD-1 are identified.

Statement Preparation Process

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Why Real Estate Title Agents Need Errors And Omissions Insurance

In fact, no matter if you have been in business for quite some time, or you are new to the real estate industry, the risks you face daily, from errors in closing costs and payoff amounts to failing to meet client expectations, make you a major target for lawsuits. Even if you are cleared of all claims, the fees spent on defense, the time spent away from your business, and the added stress of dealing with the situation can prove costly. Without the right coverages, real estate agents may put their professional and financial future on the line.

Also, it is the title industry's role to safeguard the client's escrow and other funds by providing a means for the secure transfer of their real estate in the industry. If an error or breach occurs during this transaction, the agent is held accountable for damages incurred resulting from the error or … Read More