It is very difficult for someone who is not or has not been a loan processor or closing agent to explain the HUD line by line. Those are the two people who are most involved with preparing a HUD one, and without the experience of preparation it is very difficult. A lot of real estate attorneys will go through the documents with their clients but will leave the explanations of the HUD one to the closer. Even if you have the experience, if you are a notary, you really might not understand the reason for a certain charge to either appear or not appear. I think the problem is real because a realtor wants the customer to fully understand the deal. Realtors can explain the buyer/seller charges and credits but don't want to have to explain the lender's sections to the buyer. Many times there is no l/o at the closing and the title company/settlement agent has hired you to present the documents on their behalf. Many settlement agents/lenders/signing services require you not explain the HUD 1 so that the notary does not make assurances that they have to cover. My opinion is that if you are discussing the items on a HUD 1 to a borrower, you are representing an expert opinion. If you say something on which the borrower relies, you may be held liable for your explanation.
If later, there is a legal matter over the fees shown on the statement, you might be subject to liability because you were the one who discussed the fees with the buyers. I would make it known to the buyers that the charges shown are the domain of the lender and settlement agent and that any questions require direct answers from them to the buyers. On sales, you can require that the buyers are given an opportunity to see the HUD 1 prior to the signing or else it is please sign here and realtor and l/o will have to live with it. |
