Can I use the HUD-1 Settlement Statement to confirm the terms of my mortgage?

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Can I use the HUD-1 Settlement Statement to confirm the terms of my mortgage?

I just learned the 1st monthly amount on my statement does not match the figures in the Settlement Agreement HUD-1. I have a fixed loan. The Settlement Agreement explicitly gives amount for principal, interest, insurance and taxes for the 1st loan payment. Payment is due in about a month. If I pay what the statement tells me to pay I will default in terms of the loan agreement documents; there will not be enough money to cover escrow; an incorrect amount of principal will be applied to the outstanding loan, and I will pay more interest that is not required. What can I do?

Asked on June 28, 2012 under Real Estate Law, Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The HUD-1 statement that you are referring to deals solely with the real estate transaction that you closed either a purchase with a loan obtained or a refinance of an existing loan. Such statement cannot be used to confirm the terms of your loan.

It is used to confirm the debits and credits out of the presumed formal escrow that you had on the real estate transaction you are writing about.

To confirm the terms of your loan, you need to carefully read your promissory note and calculate what your monthy payment would be based upon the interest rate and the loan's term with your lender. For additional questions that you may have, I suggest that you consult with a real estate attorney.


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