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#401947 - 08/11/05 08:46 PM RESPA Settlement Statement -Two Loans-One Closing
swiggles Offline
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I know that it is standard practice in a situation where there are two loans against one property, both being signed at the same closing table, for the closer to provide one Settlement Statement outlining all fees associated with both loans. Where, in RESPA, does the reg say that this is allowed?

OR

Is it allowed????
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#401948 - 08/11/05 09:17 PM Re: RESPA Settlement Statement -Two Loans-One Closing
sansan Offline
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When we close a simultaneous 1st and 2nd mortgage, we handle each transaction separately with fees or costs for each shown on their respective HUD-1s.

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#401949 - 08/11/05 10:00 PM Re: RESPA Settlement Statement -Two Loans-One Closing
David Dickinson Offline
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Section 3500.8(a) states that the settlement agent shall use the HUD-1 Settlement Statement in every settlement involving a federally related mortgage loan in which there is a borrower and a seller. Therefore, when there are two loan closings that happen simultaneously, you need two settlement statements.
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#401950 - 08/12/05 11:46 AM Re: RESPA Settlement Statement -Two Loans-One Closing
Anonymous
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Dave, if one HUD-1 is used for the transaction and properly reflects the loan proceeds of each loan and the costs associated with each loan all into one HUD-1, why could that not suffice? As a lender, we allow this and place a copy of the settlement statement in each loan file.

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#401951 - 08/12/05 12:26 PM Re: RESPA Settlement Statement -Two Loans-One Closing
Rocky P Online
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Someone from Texas may want to opine, but when we had a wholesale branch in Texas, the settlement agent we used stated that for piggybacks, both loans had to be on one settlement sheet.

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#401952 - 08/12/05 01:42 PM Re: RESPA Settlement Statement -Two Loans-One Closing
David Dickinson Offline
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Quote:

Dave, if one HUD-1 is used for the transaction and properly reflects the loan proceeds of each loan and the costs associated with each loan all into one HUD-1, why could that not suffice? As a lender, we allow this and place a copy of the settlement statement in each loan file.



Because the regulation REQUIRES one disclosure per loan. It's that simple.
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#401953 - 08/12/05 02:59 PM Re: RESPA Settlement Statement -Two Loans-One Closing
swiggles Offline
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Quote:

Section 3500.8(a) states that the settlement agent shall use the HUD-1 Settlement Statement in every settlement involving a federally related mortgage loan in which there is a borrower and a seller. Therefore, when there are two loan closings that happen simultaneously, you need two settlement statements.




I guess it depends on how you define "settlement." The reg doesn't say for every "transaction" or for every "loan" which there are definitely two....it says for every "settlement." RESPA defines "settlement" as "the process of executing legally binding documents regarding a lien on property that is subject to a federally related mortgage loan. This process may also be called 'closing' or 'escrow' in different jurisdictions." It's really just one closing regarding one transaction (the purchase of a homestead). There just happens to be two loans involved. However, the definition DOES say " A lien" and " A federally-related mortgage loan." In this example there ARE two loans...two federally-related loans at the closing. So, I guess I would have to agree that there should be two settlement statements.
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#401954 - 08/12/05 03:08 PM Re: RESPA Settlement Statement -Two Loans-One Closing
swiggles Offline
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Quote:

Someone from Texas may want to opine, but when we had a wholesale branch in Texas, the settlement agent we used stated that for piggybacks, both loans had to be on one settlement sheet.




I AM in Texas. Perhaps I need to check into this. It is our experience that title companies (in general) don't give a rip about RESPA and its requirements. They claim to have their own set of rules that they must abide by. Problem is THEY cannot back THEIR claims with any regulation or law.

The problem we are having is that the title company (closing agent) lumps the filing fees into one big wad on the settlement statement. So we do not know what to put on the TIL disclosure in the way of a filing fee for the D/T for our in-house second lien. Since filing fees are only exempt from the finance charge if itemized and disclosed, we are worried about "guessing" at the fee for our TIL.

The solution would be for the title company to line item the fees for each D/T separately. Or before we prepare the in-house TIL, demand to know what the filing fee is for the D/T securing the second lien.

Any thoughts?

Yes, David, I know the REAL solution is two settlement statements.
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#401955 - 08/12/05 03:41 PM Re: RESPA Settlement Statement -Two Loans-One Closing
G-dawg Offline
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If we are doing a refinance where we are giving the customer a new first mortgage that combines a first and a second mortgage, paying off the two loans from two different companies, We will use one HUD-1 or HUD-1A. That's ok, right? Thanks for any input. This is probably a dumb question ( I haven't had my coffe yet).

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#401956 - 08/12/05 03:42 PM Re: RESPA Settlement Statement -Two Loans-One Closing
Rocky P Online
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Squiggles, we had used Black Mann and Graham.

For closings, they prepared the HUD-1 identifying each charge as 1st or 2nd mortgage so we could get the Til's correct. We had questioned the single HUD-1, and (I believe) they indicated a single form was required.

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#401957 - 08/12/05 04:36 PM Re: RESPA Settlement Statement -Two Loans-One Closing
swiggles Offline
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Quote:

If we are doing a refinance where we are giving the customer a new first mortgage that combines a first and a second mortgage, paying off the two loans from two different companies, We will use one HUD-1 or HUD-1A. That's ok, right? Thanks for any input. This is probably a dumb question ( I haven't had my coffe yet).




That is correct....one loan, one settlement statement.

There are no dumb questions on BOL unless you're an "anon"......
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#401958 - 04/10/06 10:10 PM Re: RESPA Settlement Statement -Two Loans-One Closing
dfh Offline
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You may want to take a look at this link

http://firstam.com/landsakes/html/email/102299settstmt.html

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#401959 - 04/12/06 03:21 PM Re: RESPA Settlement Statement -Two Loans-One Closing
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Using one HUD1 also makes it more difficult to determine what should have been disclosed on the GFE, if we are doing the 2nd and secondary did the first mortgage.....I can guess (like probably the escrowed items relate to the first mortgage only), but there are some other gray areas...like attorney prepared documents....the attorney prepared both sets of docs, so the doc prep fee on the HUD should be split out to show what amount went toward each set, no?

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#401960 - 04/13/06 12:03 PM Re: RESPA Settlement Statement -Two Loans-One Closing
rlcarey Online
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A closing statement is a closing statement. I have seen hundreds, if not thousands of multiple loan closings on a single statement. I see nothing wrong with it nor have most of the banks that I have seen this at had any problems.
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#401961 - 06/01/06 01:57 PM Re: RESPA Settlement Statement -Two Loans-One Closing
bankerky Offline
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A different twist. Can one HUD-1 be used to close two loans for different lenders as long as both lenders are listed and the items are accurately described?

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#401962 - 06/01/06 11:14 PM Re: RESPA Settlement Statement -Two Loans-One Closing
rlcarey Online
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Galveston, TX
I don't see why not. The settlement statement is prepared by the settlement agent (normally a title company) and there is no need to separate all the charges by bank. Each bank should know what charges belong to them.
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