Posted by TamaraCA on 4/23/13 4:59pm
Msg #466815

HUD-1 Training?

I searched for this topic and didn't find anything. If you have a former conversation I can reference please advise.

So, the HUD-1 form is very confusing to me. Is there any sort of training out there to assist in explaining it? According to my NSA certification training I am only to be concerned with the 303 line where it says what funds are to be disbursed either to or from BO. I see this as a grey area as to whether or not I am required to explain the form or not. I feel obligated to give a general explanation as to what a document is. I would prefer to be a knowledgeable resource for the borrower.

Example: I had a situation happen at a re-fi signing where the Escrow officer sent me a last minute email with a changed HUD form. The new form required more money be collected from the borrower. When I presented this new amount to the BO they were alarmed and promptly called their LO. He suggested they not sign the new form from the title company and to still pay the original amount. In my closing notes I explained this situation and told them that the BO refused to sign. I assume everything worked out since they did not send me back to fix anything. And I still receive calls from that signing agency with other assignments. Should I have done anything differently? I felt like it wasen't my place to push the borrowers to sign it. Most often the BO's just glaze over when looking at the HUD and sign it.

Reply by Happy_in_Fl on 4/23/13 5:13pm
Msg #466819

One of the first things I learned when becoming a Mobile Notary, was to briefly explain, at the table, that "I am here to Witness your signing of these documents, and I can Itentify the Document to you, but even if I know the answer to your question, when I wear my Notary Cap, I cannot explain the contents of your loan, because it can be contrued as UPL.

I recommend you call your Loan Officer and ask him/her your questions, and many have done so over the years".

I have a Florida Real Estate Sales Person License (currently inactive) and know the answers perhaps, BUT- cannot/will not go into the loan specifics. (Ask yourself this question: If you did explain, and they got angry- and called the LO and cancelled, due to your answer- that would be terrible and very embarressing at the least. JMHO.

Reply by Tamara Jones on 4/23/13 5:20pm
Msg #466821

Thank you for validating my thoughts... That is basically what I say before the signing begins. I get their ID first and then follow with a comment of "I am here to assist with the signing however, if you have any specific questions regarding the contents of the documents you can call the lender directly or we can call the signing agency." I explain the general purpose of the document and if it looks like they need to choose a particular option on the form I tell them to review it before signing.

Reply by Happy_in_Fl on 4/23/13 5:24pm
Msg #466823

You have it right. Exactly.

Reply by Linda_H/FL on 4/23/13 5:31pm
Msg #466827

I'm going to disagree with the response here

and probably catch hell for it but..oh well

IMO you should be able to explain the HUD to a certain degree - not the why's of why the numbers are what they are, but just explain the form:

"This is your settlement statement - it accounts for all monies involved with your loan. Page two itemizes your closing costs, totaled <here> - this total is brought to page 1 <here>, added to your current payoff and any other disbursements they're making, all disbursements totaled <here>

Next section on page 1 is credits - your loan amount plus any credits the lender is giving totaled <here>...down at the bottom is your total credits less your total disbursements giving you a bottom line of <xx to you after 3-day rescission period> or <xx due to me now>

Page 3 compares your GFE estimated figures with your final figures and then goes on to break down the terms of the loan we'll be closing. Please look this over while I complete some of the ID forms and enter your ID in my journal. If you have any questions about those numbers we can get your loan officer on the phone immediately".


That's my spiel. No UPL - just telling them how the form is laid out.

Reply by Yoli/CA on 4/23/13 5:35pm
Msg #466829

Agree with Linda H/FL - just a description, not explanation n/m

Reply by TamaraCA on 4/23/13 5:43pm
Msg #466833

Re: Agree with Linda H/FL - just a description, not explanation

As I said in my second post "I explain the general purpose of the document". I do that every time. But if the borrower asks for specifics of why the dollar amount is what it is I refer them to the lender. This has happened a few times and the lender is always able to explain and settle make the BO understand.

Reply by Linda_H/FL on 4/23/13 5:46pm
Msg #466834

Sometimes you can find it quick...

had one a couple weeks ago - borrower says "it's off by a couple thousand" - come to find out it was the initial escrows for taxes and insurance...once I pointed that out to him he was happy.

Reply by Happy_in_Fl on 4/23/13 5:41pm
Msg #466832

Re: I'm going to disagree with the response here

Thanks Linda for your input;

True we were discussing the HUD; where as I was also considering the entire Loan package; When I see the bottom of Page One of HUD and it says they have to Provide a Check- or will receive Cash Back; I show them that info; but the rest they can read for themselves.

But, that's just me.

Reply by MW/VA on 4/23/13 6:11pm
Msg #466837

I agree, Linda. So much misinterpretation on "explaining

docs". We are there to review the nos. with the borrowers. I go over the HUD, nos. on page 1 -- settlement charges, payoff, total, less credits, equals any amt. due. I don't spend a lot of time on page 2 or page 3, but do briefly say what those are about. After all, with page 3 there are very few surprises at the closing table. Major changes & they have to re-disclose, after all.
It is UPL if I attempted to advise the borrowers if the loan was good for them or not. Any questions about the nos. of course are referred to the LO.

Reply by TamaraCA on 4/23/13 6:19pm
Msg #466838

Thank you everyone, this helps so much! Linda, I like your

script. This is what I was looking for.

Reply by TamaraCA on 4/23/13 6:26pm
Msg #466839

Apparently, it is not being done that way in my area...

I had a realtor that sat in on a signing express her appreciation for me and told me I was the best notary she had ever worked with because I simply summarized the documents purpose and meaning. She said that usally notaries in or area have a hands off aproach and simply say 'sign here'. I have a lending background so naturally I walk my clients though the docs.

That tells me that there are too many notary signing agents that have no lending experience and are in the wrong business.

Reply by JanetK_CA on 4/23/13 6:49pm
Msg #466847

Re: Apparently, it is not being done that way in my area...

Not only that, but like I think someone else said, I believe that many interpret the "do not explain" directive as an excuse to just do a "point and sign" appointment. There are some general basics that I feel we should be able to clarify for a borrower without getting into information beyond what is on the printed page, or "interpreting" why a particular number is what it is. If we're not interpreting or advising, I don't think we need to worry about UPL, in most cases. But if I never reviewed a HUD with borrowers, I'd have had a ton more no-signs than I've had. We also should be able to find where in the docs the borrower can find answers to common questions - and when we know how to find answers to uncommon questions, we're really adding value to the signing.

It's very common for me to be doing signings late in the evenings (especially Eastern Time) or on weekends, when it's often impossible to reach LOs - even when they've left their cell phone numbers. (I can't count how many times I've heard "don't hesitate to call with any questions". They just forget to add that they won't be answering... ) Being able to handle basics - and I don't mean talking them into signing, just showing them the answers so it makes sense - can make the difference between "an issue" or a smooth signing with a happy borrower.

Reply by FeliseSoCal on 4/23/13 6:37pm
Msg #466841

I agree Linda...

I don't think you should be in this business if you can't explain a HUD. You should know it backwards and forwards.
Often times a client won't sign if it's not made clear to them. A majority of my clients expect the notary to know how to explain a HUD. If you don't understand it, you will not be successful in this industry. IMHO.

I learned by working at a title company.

Reply by TamaraCA on 4/23/13 10:09pm
Msg #466879

Well Felice, I dislike your last comment...You sound snooty.

I'm so happy you were trained by a title company. Should I bow? I thought this forum's intent was to gain help when needed, Not sarcasm when not.... I have worked in lending for many years. I know what I am doing and I can learn any lending/title form when time allows. However, I work a full time job, a part time job at a vet clinic, am a student and a wife. I am new to being a signing agent and want to refine my skills in other areas of lending. Sorry if I want to use my membership here to ask for some help now and again. During my banking career our first mortgages were typically handled by another department and signings were farmed out to the title company to arrange. I have done some re-fi's of 1st Mortgages but they were few and far between all the Equity lines and loans I was signing. I understand the purpose of the HUD-1. I simply wanted to refine my knowledge in the numbers.

Reply by sueharke on 4/24/13 12:24am
Msg #466890

Re: Well Felice, I dislike your last comment...You sound snooty.

Well said! A person with an open mind to learning new skills who is not afraid of change

Reply by TamaraCA on 4/24/13 11:24am
Msg #466929

Thanks Sue, I appreciate your support and to everyone else

you have all had some Wonderful suggestions! Your wisdom and experience is very helpful. I have pulled up a real HUD-1 from a signing I'm doing this week and I am going through it with a fine tooth comb. Thank you again LindaH for the script. I love it!! I just want to be the best borrower/customer advocate that I can. After all, they are the reason we have work.

Reply by Notarysigner on 4/23/13 6:38pm
Msg #466842

Ditto! n/m

Reply by Linda Juenger on 4/23/13 10:34pm
Msg #466881

Have to agree with Felise on this one. If you can't

explain the HUD frontwards and backwards, stop doing signings until you do. Those 3,4,5 pages are the MEAT of the loan. Any problems at all will be caught in the first 5 min of a signing and it all starts with the HUD. You can head off a world of problems if the HUD is right and save everyone a lot of time and trouble. Sure would hate to sign an entire loan pkg and find out at the end that the HUD isn't right.

I'm not being rude, mean, sarcastic. That is not my intention.

Reply by Linda Juenger on 4/23/13 10:35pm
Msg #466882

And Tamara. Your profile says you have 13 years exp n/m

Reply by TamaraCA on 4/23/13 11:17pm
Msg #466885

Thats because I do have 13 years of experience.. sorry to

Sound defensive.

Reply by CaNotary777 on 4/24/13 1:23am
Msg #466893

Brilliantly explained Linda! Here's what I did.....

Tamara, I am pretty new to Loan signing. That being said, I have completed more than 100 loan signings. In h beginning I used to struggle with HUD-1 and used to jump to the second last page of the doc which talks about Principal ROI, loan type( fixed or otherwise). 99% of the borrowers were happy to see the loan number were consistent with what they had discussed with their LO. And then they would gladly go ahead and start signing. Now in my heart i knew this is (barely) ok but not the IDEAL way to go. I agree with Linda we notaries must learn to explain HUD. Reflect for a moment on who we are.. are we really ONLY Notaries? Are we not Loan signing agents as well? We are BOTH! We DO need to explain the BO what HUD is all about. The way I learned is this:
1) I printed out real HUD docs from internet websites which teach you how to study the HUD and then in my leisure i started studying them minutely. Guess what i realized it was darn easy! Just needed to familiarize myself with it.
Tam, Linda has nicely explained how to explain it.
Hope this is useful

Reply by garland/CA on 4/24/13 1:05pm
Msg #466947

Understanding the HUD is essential

I agree with Linda as well. Very often borrowers/puchasers/sellers have basic questions regarding the numbers on the HUD and they won't sign anything further until they feel comfortable.
We can't answer everything (why some fees are applied, why some credits are/are not there that they were promised, etc), but we can point out things like collection for initial deposits for escrow accounts, help them see if property taxes are included or homeowner's insurance, where it shows the appraisal was paid outside closing, etc.
When there are questions like "where is my credit for..." they have to call title or their loan officer. Not everything can be answered (rather pointed out) by the NSA, a great deal can be made clear and the signing goes much more smoothly.
Know the difference between what you can point out and what the lender or title must answer.

Reply by ReneeK_MI on 4/25/13 10:33am
Msg #467134

My 2 cents on this

IMO, the best way to reach a full understanding of the HUD is to separately research each line item. Now, there is often a vast divide between what you understand, and what you say to a borrower - but fully understanding the entire thing is key.

Learn the definition of each line item. Learn the way the accounting is shown (the HUD is like an accounting ledger - know what a credit looks like, a debit, POC items, the general math of it all). Learn how escrow accounts are calculated - well enough that YOU could calculate them. Learn how payoffs are calculated well enough that YOU could do it. Tax pro-rations, EMD's, etc., etc. All of it.

Once you know what each item is, and know how they are calculated, and you could do all the math of it in your sleep - 99% of all your HUD issues are gone, because usually all it takes is to shine the light of understanding for the borrower.

"WHY is this HUD more than the other one?" Well, find what changed! It might be a tax payment had been over-looked, or a Homeowner's premium, or some other very easily provided answer.

"They said it would be NO COST!" Well, could be there is a credit offsetting all LENDER'S fees - often the lender says "no LENDER fees" but there are still settlement fees, maybe escrows, etc.