Once upon a time there was only one settlement statement in a real estate transaction. All parties signed and left the closing table with a copy of the same form. Things were much simpler then.
Fast forward to October 2015 when new TRID regulations enforced stricter rules concerning how this information was disclosed to the consumers, as well as beefing up privacy policies concerning personal information. As a result, the Closing Disclosure Form (CDF) was born.
The CDF is the settlement statement that replaced the HUD, only it is designed strictly for the buyer only. It contains information specific to their loan amount, closing costs, loan terms, and other such personal information. As a result, this form is signed only by the buyer, and the title company and lender are instructed by law to only share this form with the buyer.
Because the sellers will also need a settlement statement (CDF) – and because this is not provided by the buyer’s lender like the buyer CDF is – it is the responsibility of the Title Company to now create and provide this additional document. As this is a new, additional form not required in the past, it has become the norm in the industry now for the title company to charge a fee for this form, payable by the sellers.
Now, real estate agents and brokers have been used to receiving a copy of the old HUD in the past, however, due to new TRID regulations and privacy restrictions, they are no longer permitted to view or receive copies of these new CDF’s. As such, ALTA has designed a form they are calling the “ALTA Settlement Statement”. This form is specifically for the agents and brokers to receive at the end of the transaction. There is a separate one for the Buyer Agent and another for the Selling Agent. These may be used as a disbursement sheet, as well as an additional disclosure for recording fees, assessments or any other fees that require further itemization or disclosure. (Note: If the buyer and seller wish, they may share their respective CDF’s with their brokers at their own discretion, but it can not be provided by the Lender or Title Company to anyone other than the Buyer or Seller)
Worth mentioning, the old HUD is still used in cash transactions and reverse mortgages, with all parties permitted to receive a copy as in the past.
As always, if you have any questions about this – or any other real estate transaction or title insurance issues – we hope that you will contact Cumberland Title to help you sort through the process.
