Anyone else experiencing short sale closers at the banks that do not know how to read a HUD?

Amazing, HUDs getting rejected because the banks short sale closer can not read a HUD.   

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Permalink Reply by Satar Naghshineh on May 10, 2012 at 6:03am

Do you have a specific example? It's usually the agents that don't know how to read a HUD or even work one.

For the servicers, I find that some of their guidelines require certain HUD line numbers reflect certain costs or statements.  Other than that, I haven't come across one that couldn't read one. But then again, I control the HUD before it gets sent out, so mine make sense! ;)

Permalink Reply by Jeff Payne on May 10, 2012 at 6:10am

Yes, they do not understand how to read the 1100 and 1200 sections or understand that there is a credit on the front page in the 500 section.  I have had 4 different files in the last week that the HUD was rejected because the closers thought that the title policy and documentary stamps were being charged twice.  

I agree that most agents can not read a HUD also but am always surprised when bank closers can not read one.  When did the HUD format change, I think a few years ago and I have had bank closers say they have never "seen a HUD like this"

 

Permalink Reply by Satar Naghshineh on May 11, 2012 at 5:05am

Well, if there is a line item for title in section 500, then there shouldn't be a line item in 1100. In reality, it should be in section 500, but I've seen it in section 1100 as well. However, it shouldn't be in both sections.

If you upload a copy of a rejected HUD, I can see why they are confused.

I used to create my own seller side HUDs in the beginning. Then the banks started saying that they needed it from a title company. Then they required it in the long format with the line items showing. They should have just stuck with the seller estimate and either agree to the charges or not.

Permalink Reply by Jeff Payne on May 11, 2012 at 5:10am

It came directly from the title company and is just like every single HUD that we use.    The title company is required to show the title fees and state transfer taxes (that are paid by the seller) as a charge to the buyer and it gets credited on the front page in the 500 section.  Been that way since the HUD-1 changed I believe early last year or year before....

 

Permalink Reply by Satar Naghshineh on May 11, 2012 at 6:21am

Haha  now I am confused. My answer above is for title policy. In regards to transfer tax, If it is a charge to the seller, it is in section 500 as part of the "settlement charges to seller" which includes other settlement charges to seller, such as real estate commissions and detailed in section 1200 (for transfer tax). If the buyer is paying for it, it shouldn't show up as a credit in section 400 or wherever you are seeing it as a credit.

Like I said, I will have to see what you are sending them.

Permalink Reply by Smitty on May 10, 2012 at 7:48am

Every day.

Actually I have to guide some attorneys too.  It's kinda scary.

Permalink Reply by Jeff Payne on May 11, 2012 at 6:28am

Satar, it has to do with the GFE, if it is a charge that is on the GFE for the buyer  but is being paid by the seller, like title policy or transfer taxes, RESPA requires it to be on the charged to the buyer on back page and credited on the front page.  That is what the bank short sale closers do not understand

Direclty from RESPA guidelines

Q:

How should payments by the seller or real estate agent that are for settlement services

included on the GFE be shown on the HUD-1?

A:

If a seller or real estate agent pays for a charge that was included on the GFE, the

charges should be listed in the borrower's column, with an offsetting credit reported in Lines 204-

209 of the HUD-1, identifying the party paying the charge. For a seller-paid charge, the charge

should also be listed in Lines 506-509. For a charge paid by the real estate agent, the name of the

person paying the charge must also be listed.

 

The General Instructions indicate that if a charge has been shown on the GFE as

payable by the borrower but at closing it is paid by another person, including by the loan

originator in a loan other than a no-cost

loan, the fee should be shown in the borrower’s column

on the HUD-1 and be offset by listing a credit to the borrower on lines 204-209 and in the 500 lines

 

 

 

Permalink Reply by Jeff Payne on May 11, 2012 at 6:33am

Here is the HUD that is approved by buyers lender and title company, the one that the short sale closer thought was wrong.  I whited out any names but this is the approved HUD.

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Permalink Reply by Satar Naghshineh on May 14, 2012 at 12:30pm

Sorry for the delay, got real busy. Looks fine to me. i think the issue is you are sending them too much info. I would send the seller side info only unless they specifically ask for buyer side as well.

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