HUD-1 Replacement Information
The **HUD-1 Settlement Statement** was historically used to itemize all charges and credits in real estate transactions. However, the **Consumer Financial Protection Bureau (CFPB)** introduced the **Closing Disclosure (CD)** to simplify the process and improve consumer understanding. The Closing Disclosure combines elements of both the **Truth in Lending (TIL)** form and the **HUD-1**, providing a clearer, standardized layout. Borrowers must receive the CD at least **three business days before closing**, giving them time to review costs, interest rates, and payment terms. The CD applies primarily to **closed-end consumer mortgage loans**, while the HUD-1 is still used for certain **reverse mortgages** and **HELOCs** (Home Equity Lines of Credit).
Florida Legal Definition
In **Florida**, the **Closing Disclosure** serves as the official document replacing the HUD-1 for most residential mortgage transactions under federal **TRID regulations**. Florida lenders, title agents, and closing attorneys are required to follow **CFPB** rules to ensure that borrowers receive timely and accurate disclosures. The CD must clearly show all settlement charges, including loan costs, title fees, prepaid taxes, and escrow payments. Although the HUD-1 may still appear in limited cases, the **Closing Disclosure** is the legally recognized form for standard residential closings in Florida. State law complements federal disclosure requirements by mandating transparency and accuracy in all real estate settlements.
How It’s Used in Practice
In practice, the **Closing Disclosure** is prepared and provided by the **lender or settlement agent** before the loan closing. It details the final loan terms, payment schedule, and all fees associated with the transaction. In Florida, title companies often coordinate with lenders to ensure consistency between the **Loan Estimate (LE)** and the **Closing Disclosure (CD)**. Borrowers use the CD to verify that costs haven’t changed significantly since the Loan Estimate was issued. During closing, both buyer and seller review and sign the document to finalize the transaction. The CD’s standardized design helps prevent confusion, promotes fairness, and ensures regulatory compliance in mortgage lending.
Key Takeaways
- The **Closing Disclosure (CD)** replaced the **HUD-1 Settlement Statement** for most mortgage loans on October 3, 2015, under the **TRID rule**.
- It combines information from the former HUD-1 and Truth in Lending forms into one clear, borrower-friendly document.
- Borrowers must receive the CD at least three business days before closing to review loan terms and costs.
- In Florida, the CD is the legally required disclosure document for most residential real estate closings.
- The HUD-1 remains in use only for certain transactions, such as reverse mortgages and HELOCs.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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AFFILIATED BUSINESS ARRANGEMENT DISCLOSURE
THIS IS TO GIVE YOU NOTICE that Barnes Walker Title, Inc. is a separate entity from Barnes Walker, Goethe, Perron, Shea, Johnson & Robinson, PLLC (“BWGPSJR). However, BWGPSJR has a business relationship with Barnes Walker Title, Inc. Barnes Walker Title, Inc. is wholly owned in equal shares by two of the three principals of BWGPSJR, Garret T. Barnes and Adron H. Walker. As such it is not uncommon for BWGPSR to refer clients to Barnes Walker Title, Inc. Because of this relationship, any such referral will provide a financial or other benefit to those principals of BWGPSR.
Pursuant to 12 C.F.R. § 1024.15(b)(2) (2021), as a client of BWGPSR, you may be referred to Barnes Walker Title, Inc. for the issuance of a title insurance policy and other settlement services as part of BWGPSJR’s representation of you in connection with the settlement of your loan on, or the sale, purchase, or refinance of, your property.
THERE ARE FREQUENTLY OTHER TITLE INSURANCE AND SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES.
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