Monitoring all the fees and payments in a real estate transaction doesn’t have to be complicated. When you use title closing software like Easy HUD, you can depend on the software to keep all your payments straight. This includes payments pre-disbursed by the lender, also known as net charges.
The Net Box
If you look at the HUD-1 settlement statement laid out in Easy HUD you’ll notice that many of the line items have checkboxes next to them. These are Net boxes and are used to indicate charges pre-disbursed by the lender. It’s important to track these because you don’t want to end up paying certain fees twice, or not at all.
There are only a few Net boxes on page 1 of the HUD, in section 200. Here you’ll find several blank lines that can be used to itemize various amounts that have been paid by the borrower or the borrower’s agent. There are four lines on the screen but if you click the More… button below these lines, you can add as many additional itemization lines as you need.
Page 2 is where Net boxes are used extensively. Several boxes are pre-checked because they are always or almost always paid by the lender. These include origination charges, mortgage insurance premium, homeowner’s insurance premium, and initial escrow deposit. These boxes can be unchecked if for some reason these are not paid by the lender.
Most of the other line items on page 2 have Net boxes so can be checked if pre-disbursed by the lender. Careful tracking of each fee ensures that the final HUD form will be accurate and the correct amount is requested from the buyer.
The Ledger Module
Items marked “Net” in the HUD settlement statement software are accounted for in the optional Ledger Module. The deposit from the lender is adjusted by all line items marked “Net” so that the deposit recorded in the ledger is the actual amount rather than the loan from line 202 on the HUD form. This is also true for refinance HUD forms, though the loan amount is from line 1600 on that form rather than line 202.
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