Which parties have a right to see a HUD settlement statement?

20 Replies

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

are you saying you are the lender for the buyer? If so, why not just stipulate that funding will be pending your approval of the HUD (like a conventional lender would)?

@Mark Dante In this case, I would be the lender getting paid off when the home sells. I should be able to see the HUD, correct? How can I arrange it so I can get a copy of the HUD? I am getting pushback from the title company when I request the HUD; they are just telling me to get it from the seller. I see myself as an interested party that has reason to see it and don't understand why I need to the seller's (borrower's) permission. What would be the mechanism (maybe a paragraph in my loan document) that says I am allowed to see all HUDs from purchase and sale?

No, you don't have a right to see the HUD. It contains sensitive personal financial information.

Even if you were a party to that transaction, which you are not, you may only be entitled to a redacted copy.

Originally posted by @Paul Winka :

@Mark Dante In this case, I would be the lender getting paid off when the home sells. I should be able to see the HUD, correct? How can I arrange it so I can get a copy of the HUD? I am getting pushback from the title company when I request the HUD; they are just telling me to get it from the seller. I see myself as an interested party that has reason to see it and don't understand why I need to the seller's (borrower's) permission. What would be the mechanism (maybe a paragraph in my loan document) that says I am allowed to see all HUDs from purchase and sale?

 Why do you think you are an interested party to the transaction ?  You submitted a payoff and will be paid via the proceeds.  

Does your private lending contain a % of the profit provision ? 

The lender for the purchaser will see and approve the HUD

512-293-3885

I agree with Tom and Greg.  Unless the loan was the rare case where you were suppose to receive a portion of the profits then absolutely not.  If it was that type of loan the payoff you sent the title company would have triggered them to include all the financial data with your check.

@Michael Biggs Actually, it was one of the rare cases; I have a signed trust & agreement that says I am supposed to get 25% of profit. Seller is not cooperating, saying house sold for a loss, being hard to get hold of and being obtuse on purpose. If I furnish this trust & agreement to title company, would I be able to get the HUD then?

@Greg H. What would be the "receipt" of the transaction be if it was just an ordinary interest payoff? The only thing I really have is the email chain from the title company and the money that was deposited in my account. Is that enough for bookkeeping?  

@Tom Gimer   is an expert on this.  I think when the title company asked for a payoff you should told them what information you needed before you could provide it.

@Paul Winka

In that case, I would have submitted a payoff including a 25% profit based on the only information I had.  That would force the seller to come back to you with "proof " to get the number reduced 

512-293-3885

@Michael Biggs   the equity share notes I have done.. I simply put the payoff demand in with my % interest due plus whatever % of Net equity flowing out of the deal.

Now of course the borrower can jack it up by putting junior liens or other things on there to reduce the net.. 

However its an issue with borrower and lender not title co.. they are neutral

Originally posted by @Paul Winka :

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

 It's written in the contract who has permission to see this. Typical parties included; Buyer, Seller, Realtors & Lenders. As a lender you should be reviewing this statement. If it's not written in the contract that you have permission I recommend you make it a condition of loan approval on the next one. You need to see things like where the down payment money came from.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633
Originally posted by @James Wise :
Originally posted by @Paul Winka:

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

 It's written in the contract who has permission to see this. Typical parties included; Buyer, Seller, Realtors & Lenders. As a lender you should be reviewing this statement. If it's not written in the contract that you have permission I recommend you make it a condition of loan approval on the next one. You need to see things like where the down payment money came from.

In my "past life" I practiced real estate law and handled or was involved in well over 1000 closings. I don't recall one time where I provided the sellers lender a HUD. If somebody other than the buyer, seller, or agents asked for it, I would tell them to get it from their client. And I have dealt with several hard money lenders as well.

Originally posted by @Mark Dante :
Originally posted by @James Wise:
Originally posted by @Paul Winka:

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

 It's written in the contract who has permission to see this. Typical parties included; Buyer, Seller, Realtors & Lenders. As a lender you should be reviewing this statement. If it's not written in the contract that you have permission I recommend you make it a condition of loan approval on the next one. You need to see things like where the down payment money came from.

In my "past life" I practiced real estate law and handled or was involved in well over 1000 closings. I don't recall one time where I provided the sellers lender a HUD. If somebody other than the buyer, seller, or agents asked for it, I would tell them to get it from their client. And I have dealt with several hard money lenders as well.

I assume you mean buyers lender? I've also been involved in 1,000's of closings. In my experience it's very common that Buyers lender wants to see if earnest money is on the CD/HUD. They also want to see if there are 2nd mortgages from the seller on there.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633
Originally posted by @James Wise :
Originally posted by @Mark Dante:
Originally posted by @James Wise:
Originally posted by @Paul Winka:

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

 It's written in the contract who has permission to see this. Typical parties included; Buyer, Seller, Realtors & Lenders. As a lender you should be reviewing this statement. If it's not written in the contract that you have permission I recommend you make it a condition of loan approval on the next one. You need to see things like where the down payment money came from.

In my "past life" I practiced real estate law and handled or was involved in well over 1000 closings. I don't recall one time where I provided the sellers lender a HUD. If somebody other than the buyer, seller, or agents asked for it, I would tell them to get it from their client. And I have dealt with several hard money lenders as well.

I assume you mean buyers lender? I've also been involved in 1,000's of closings. In my experience it's very common that Buyers lender wants to see if earnest money is on the CD/HUD. They also want to see if there are 2nd mortgages from the seller on there.

I was replying on my phone before, which is a pain. But just to clarify, I would most certainly provide the BUYER's lender the HUD. (If possible, I would provide it to buyer's lender even before the buyer. I would tell an agent a hundred times "This HUD is NOT approved by the lender yet so it is not final. Do NOT give it to your client yet." And 9x out of 10, they would give it to their buyer who would get a certified check only to be told the amount was wrong because the HUD changed.)

But as for the seller's lender (who was getting paid off), I would not provide the HUD.

The term "HUD" is thrown around but remember the HUD-1 was replaced by the Closing Disclosure in 2015. For transactions where a CD is not required some still use the HUD-1 form. We don't ... we use ALTA settlement statements.

There are very specific CFR guidelines concerning the disclosure of consumers' non-public personal financial information. From the start of TRID this has been an issue and we prepared buyer-side and seller-side CDs only and lenders were facing stiff penalties for violations. Until very recently there were still major issues concerning whether the buyer's own real estate agent or the seller in the transaction were permitted to see the buyer's CD. The has been some clarification with opt-outs, waivers and specific instructions on redactions that address this.

When in doubt the answer is NO you cannot see the buyer's CD. 

@Tom Gimer

Thx for clarification of HUDs vs CDs. I'll use the correct terminology. 

If I have it my signed loan agreement that I get to see all CDs from buying or selling, would this be unconscionable or unethical? I can leave it at that if it is indeed unethical. 

Here's what is driving all of this...I've asked it up above, but I never got a clear answer it: When I get my payoff from a sale of a property, what is my "receipt" of that transaction? The CD seems to be that to me. Is there something else I could use as a proxy to from the title company? Best I have now is just the email chain from the title company asking for the payoff, which seems kind of a rough and unofficial.

Yes, by seeing the CDs after the sale, I will know how much the house sold for. But I would find that out from public record later on anyway. Personally, if I was the seller and my private lender wanted to see all the CDs, I would be ok with it...if I am being an honest broker, why should I care? 

@Ned Carey , I'd be curious on your opinion on this. 

Your receipt for the transaction is your written payoff statement followed by the payoff itself and the release or certificate of satisfaction you are required by law to record among the land records within X days of receiving payment.

The issue I see in all of this is you are asking the title company for something only your client, if anyone at all, should be sharing with you.

@Paul Winka I am not an attorney so this is clearly just an opinion.  I think the answer is simple. Your payoff instructions include the receipt of the 25% share of the profit and proof of what that amount should be. You are in the strong position. Simply do not release your mortgage until proof of appropriate payment. 

My guess as @Tom Gimer says is the title company may not be allowed to share it with you, without approval of the seller. Tell the title company if the Seller does not allow them to send you a copy of the hud for approval then no release. No release - no settlement.

Originally posted by @Paul Winka :

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

My lender is always copied on emails with the HUD from the title co

Tell your buyers to send it so you can look over it and makes sure everything is accounted for correctly 

Originally posted by @Chris Purcell :
Originally posted by @Paul Winka:

When a home is sold, and I am the lender (I do private lending), do I have the right to get the HUD settlement statement?

My lender is always copied on emails with the HUD from the title co

Tell your buyers to send it so you can look over it and makes sure everything is accounted for correctly 

Is your lender always getting a % of profits on your deals? 

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