Settlement Agents Prepare The HUD-1s: Who's responsible?

Question: : We use settlement agents for most of our closings. The settlement agents prepare the HUD-1s for closing. Unfortunately, the settlement agents are not consistent in the ways they prepare the disclosures. Our examiner has identified several issues on the HUD-1s that are completed by the settlement agents. Are we responsible for errors on the HUD-1 if a settlement agent completes it? If so, what should we do?

Answer: Yes. You are responsible because you have accepted the work. And you are also responsible because your examiner can hold you to it. So here's what you should do. First, give all of your settlement agents instructions. This may include a model completed HUD-1 and/or more detailed instructions. Second, instruct all of your settlement agents that if they don't prepare the HUD-1 correctly, you can't continue to work with them.

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 3, 4/01