Should You Use HUD Forms For Non-RESPA Transactions?
Nobody likes extra paperwork so many of us look for ways to avoid filling out documents. The HUD-1 settlement statement must be used for almost all property purchases that involve a mortgage. There are cases where you can skip the paperwork–but should you?
For example, the HUD-1A is an optional form used in refinance transactions. Agents can use the full HUD-1 form in single-party transactions, such as refinancing or equity lines of credit. HUD even recommends using the HUD 1 settlement sheet even when not required by RESPA regulations. Some agents hesitate because they are afraid that by using the forms they are opening themselves to liability or unnecessary regulation.
Actually agents are safe using the HUD form when not required. The New RESPA Rule FAQ (PDF file) available on HUD’s website says on page 44 that “using the HUD-1 form does not subject a transaction to coverage under RESPA”. So even if you use the HUD-1 on a non-RESPA transaction, you won’t suddenly be exposing yourself to RESPA rules.
The obvious next question is, “Why would I want to fill out a government form if I don’t have to?” The answer is that filling out the HUD 1 using HUD settlement statement software like Easy HUD is actually easier than figuring out a refinance, credit line or other transaction by hand. It’s quick and simple to fill out the forms when the software does the math for you. The form pulls information from the client record so you minimize the chance of data entry statements. You have a standard form where you can easily find the information you need, especially if you routinely work with HUD-1 forms.
Even if you complete the HUD-1 form purely for internal use, the features of a comprehensive legal management software package reduce the time you spend completing a transaction and getting the information you need. You can handle more clients and that has a positive effect on your firm’s bottom line.
Skeptical? Find out for yourself. Try Easy Soft’s title closing software risk-free for 30 days. You’ll see that HUD form automation improve the quality of real estate financial services you can offer your clients.