Closing Statement or Settlement Statement
AKA HUD-1 The balance sheet of the closing detailing all closing/settlement costs. Required when there is a residential 1st mortgage loan, but used in most closings. Primary instrument of RESPA compliance.
Good Faith Estimate (GFE)
Disclosure lenders are required to provide borrowers within three days of loan application that details the settlement or closing costs the borrower is likely to incur.
Method of closing where both buyer and seller deposit the required documents and money with a third party to close. The prevailing practice in some states. Not a "face to face" closing typical in Indiana.
Unearned and illegal referral fees offered or received when no service has actually been provided as defined by RESPA. (i.e. Real estate agents are prohibited from giving or receiving such fees from service providers such as lenders, title companies or appraisers. Referrals among real estate brokerages are exempt).
Controlled Business Arrangement
The bundling of services such as real estate brokerage, lending and title work. Requires the disclosure of any cross ownership among firms and the availability of other providers.
Affidavit of Title or Vendor's Affidavit
Sworn statement of the seller assuring there are no new liens, judgments or other defects to title.
Real Estate Settlement Procedures Act (RESPA)
Federal law requiring disclosure of all settlement charges/fees and prohibits kickbacks. Applies when there is a residential 1st mortgage loan. The HUD-1is the primary instrument of compliance.
An amount owed to one party and entered in their favor on the
An amount owed by one party and charged against them on the closing statement.
An expense paid in advance.
An expense that has not yet been paid.
A method of reconciling prepaid and accrued items at closing through debits and credits.