![](media/image1.wmf)

**Table of Contents**

**I. Introduction**

**II. Buying & Financing A Home**

**A.** Role of the Real Estate Broker

**B.** Selecting an Attorney

**C**. Terms of the Agreement of Sale

**D**. Shopping For a Loan

**E.** Selecting a Settlement Agent

**F.** Securing Title Services

**G.** RESPA Disclosures

**H.** Processing Your Loan Application

**I.** RESPA Protection Against Illegal Referral Fees

**J**. Your Right to File Complaints

**III. Your Settlement Costs**

**A.** Specific Settlement Costs

**B.** Calculating the Amount You Need At Settlement

**C.** Adjustments To Costs Shared By Buyer and Seller

**D.** HUD‑1 Settlement Statement

**IV. Appendix**

**I. Introduction**

ongratulations! You have decided to buy a new home. This booklet will
help you take this big financial step by describing the home buying,
home financing, and settlement process. Lenders and mortgage brokers are
required by federal law, the Real Estate Settlement Procedures Act
("RESPA"), to give you this booklet. You should receive it when applying
for a loan, or within three business days afterwards. Real estate
brokers frequently hand out this booklet as well.

You probably started the home buying process in one of two ways: you saw
a home you were interested in buying or you consulted a lender to figure
out how much money you could borrow before you found a home (sometimes
called pre-qualifying). The next step is to sign an agreement of sale
with the seller, followed by applying for a loan to purchase your new
home. The final step is called "settlement" or "closing," where the
legal title to the property is transferred to you.

At each of these steps you often have the opportunity to negotiate the
terms, conditions and costs to your advantage. This booklet will
highlight such opportunities. You will also need to shop carefully to
get the best value for your money. There is no standard home buying
process used in all localities. Your actual experience may vary from
those described here. This booklet takes you through the general steps
to buying a home, to eliminate, as much as possible, the mysteries of
the settlement process.

**II. BUYING AND FINANCING A HOME**

**A. Role of the Real Estate Broker**

requently, the first person you consult about buying a home is a real
estate agent or broker. Although real estate brokers provide helpful
advice on many aspects of home buying, **they may serve the interests of
the seller, and not your interests as the buyer.** The most common
practice is for the seller to hire the broker to find someone who will
be willing to buy the home on terms and conditions that are acceptable
to the seller. Therefore, the real estate broker you are dealing with
may also represent the seller. However, you can hire your own real
estate broker, known as a buyer's broker, to represent your interests.
Also, in some states, agents and brokers are allowed to represent both
buyer and seller.

Even if the real estate broker represents the seller, state real estate
licensing laws usually require that the broker treat you fairly. If you
have any questions concerning the behavior of an agent or broker, you
should contact your State's Real Estate Commission or licensing
department.

Sometimes, the real estate broker will offer to help you obtain a
mortgage loan. He or she may also recommend that you deal with a
particular lender, title company, attorney or settlement/closing agent.
You are not required to follow the real estate broker's recommendation.
You should compare the costs and services offered by other providers
with those recommended by the real estate broker.

**B. Selecting an Attorney**

efore you sign an agreement of sale, you might consider asking an
attorney to look it over and tell you if it protects your interests. If
you have already signed your agreement of sale, you might still consider
having an attorney review it. An attorney can also help you prepare for
the settlement. In some areas attorneys act as settlement/closing agents
or as escrow agents to handle the settlement. **An attorney who does
this will not solely represent your interests, since, as
settlement/closing agent, he or she may also be representing the seller,
the lender and others as well.**

Please note, in many areas of the country attorneys are not normally
involved in the home sale. For example, escrow agents or escrow
companies in western states handle the paperwork to transfer title
without any attorney involvement.

If choosing an attorney, you should shop around and ask what services
will be performed for what fee. Find out whether the attorney is
experienced in representing homebuyers. You may wish to ask the attorney
questions such as:

-   What is the charge for negotiating the agreement of sale, reviewing
    documents and giving advice concerning those documents, for being
    present at the settlement, or for reviewing instructions to the
    escrow agent or company?

-   Will the attorney represent anyone other than you in the
    transaction?

-   Will the attorney be paid by anyone other than you in the
    transaction?

**C. Terms of the Agreement of Sale**

f you receive this Booklet before you sign an agreement of sale, here
are some important points to consider. The real estate broker probably
will give you a preprinted form of agreement of sale. You may make
changes or additions to the form agreement, but the seller must agree to
every change you make. You should also agree with the seller on when you
will move in and what appliances and personal property will be sold with
the home.

 [Sales Price.]{.underline} For most home purchasers, the sales price
is the most important term. Recognize that other non-monetary terms of
the agreement are also important.

 [Title]{.underline}. "Title" refers to the legal ownership of your new
home. The seller should provide title, free and clear of all claims by
others against your new home. Claims by others against your new home are
sometimes known as "liens" or "encumbrances." You may negotiate who will
pay for the title search, which will tell you whether the title is
\"clear.\"

 [Mortgage Clause]{.underline}*.* The agreement of sale should provide
that your deposit would be refunded if the sale has to be canceled
because you are unable to get a mortgage loan. For example, your
agreement of sale could allow the purchase to be canceled if you cannot
obtain mortgage financing at an interest rate at or below a rate you
specify in the agreement.

 [Pests]{.underline}*.* Your lender will require a certificate from a
qualified inspector stating that the home is free from termites and
other pests and pest damage. You may want to reserve the right to cancel
the agreement or seek immediate treatment and repairs by the seller if
pest damage is found.

 [Home Inspection]{.underline}. It is a good idea to have the home
inspected. An inspection should determine the condition of the plumbing,
heating, cooling and electrical systems. The structure should also be
examined to assure it is sound and to determine the condition of the
roof, siding, windows and doors. The lot should be graded away from the
house so that water does not drain toward the house and into the
basement.

Most buyers prefer to pay for these inspections so that the inspector is
working for them, not the seller. You may wish to include in your
agreement of sale the right to cancel, if you are not satisfied with the
inspection results. In that case, you may want to re-negotiate for a
lower sale price or require the seller to make repairs.

 [Lead-Based Paint Hazards in Housing Built Before 1978]{.underline}.
If you buy a home built before 1978, you have certain rights concerning
lead-based paint and lead poisoning hazards. The seller or sales agent
must give you the EPA pamphlet "Protect Your Family From Lead in Your
Home" or other EPA-approved lead hazard information. The seller or sales
agent must tell you what the seller actually knows about the home's
lead-based paint or lead-based paint hazards and give you any relevant
records or reports.

You have at least ten (10) days to do an inspection or risk assessment
for lead-based paint or lead-based paint hazards. However, to have the
right to cancel the sale based on the results of an inspection or risk
assessment, you will need to negotiate this condition with the seller.

Finally, the seller must attach a disclosure form to the agreement of
sale, which will include a Lead Warning Statement. You, the seller, and
the sales agent will sign an acknowledgment that these notification
requirements have been satisfied.

 [Other Environmental Concerns]{.underline}*.* Your city or state may
have laws requiring buyers or sellers to test for environmental hazards
such as leaking underground oil tanks, the presence of radon or
asbestos, lead water pipes, and other such hazards, and to take the
steps to clean-up any such hazards. You may negotiate who will pay for
the costs of any required testing and/or clean up.

 [Sharing of Expenses]{.underline}. You need to agree with the seller
about how expenses related to the property such as taxes, water and
sewer charges, condominium fees, and utility bills, are to be divided on
the date of settlement. Unless you agree otherwise, you should only be
responsible for the portion of these expenses owed after the date of
sale.

 [Settlement Agent/Escrow Agent or Company]{.underline}. Depending on
local practices, you may have an option to select the settlement agent
or escrow agent or company. For states where an escrow agent or company
will handle the settlement, the buyer, seller and lender will provide
instructions.

 [Settlement Costs]{.underline}*.* You can negotiate which settlement
costs you will pay and which will be paid by the seller.

**D. Shopping For a Loan**

our choice of lender and type of loan will influence not only your
settlement costs, but also the monthly cost of your mortgage loan. There
are many types of lenders and types of loans you can choose. You may be
familiar with banks, savings associations, mortgage companies and credit
unions, many of which provide home mortgage loans. You may find a
listing of some mortgage lenders in the yellow pages or a listing of
rates in your local newspaper.

[Mortgage Brokers]{.underline}. Some companies, known as "mortgage
brokers," offer to find you a mortgage lender willing to make you a
loan. **A mortgage broker may operate as an independent business and may
not be operating as your "agent" or representative.** The lender, you as
the borrower, or both, may pay your mortgage broker. You may wish to ask
about the fees that the mortgage broker will receive for its services.

[Government Programs]{.underline}. You may be eligible for a loan
insured through the Federal Housing Administration ("FHA") or guaranteed
by the Department of Veterans Affairs or similar programs operated by
cities or states. These programs usually require a smaller down payment.
Ask lenders about these programs. You can get more information about
these programs from the agencies that run them. ([See]{.underline}
Appendix to this Booklet.)

[CLOs]{.underline}. Computer loan origination systems, or CLOs, are
computer terminals sometimes available in real estate offices or other
locations to help you sort through the various types of loans offered by
different lenders. The CLO operator may charge a fee for the services
the CLO offers. This fee may be paid by you or by the lender that you
select.

[Types of Loans]{.underline}***.*** Loans can have a fixed interest rate
or a variable interest rate. Fixed rate loans have the same principal
and interest payments during the loan term. Variable rate loans can have
any one of a number of "indexes" and "margins" which determine how and
when the rate and payment amount change. If you apply for a variable
rate loan, also known as an adjustable rate mortgage ("ARM"), a
disclosure and booklet required by the Truth in Lending Act will further
describe the ARM. Most loans can be repaid over a term of 30 years or
less. Most loans have equal monthly payments. The amounts can change
from time to time on an ARM depending on changes in the interest rate.
Some loans have short terms and a large final payment called a
"balloon." You should shop for the type of home mortgage loan terms that
best suit your needs.

[Interest Rate, "Points" & Other Fees]{.underline}. Often the price of a
home mortgage loan is stated in terms of an interest rate, points, and
other fees. A "point" is a fee that equals 1 percent of the loan amount.
Points are usually paid to the lender, mortgage broker, or both, at the
settlement or upon the completion of the escrow. Often, you can pay
fewer points in exchange for a higher interest rate or more points for a
lower rate. Ask your lender or mortgage broker about points and other
fees.

A document called the Truth in Lending Disclosure Statement will show
you the "Annual Percentage Rate" ("APR") and other payment information
for the loan you have applied for. The APR takes into account not only
the interest rate, but also the points, mortgage broker fees and certain
other fees that you have to pay. Ask for the APR before you apply to
help you shop for the loan that is best for you. Also ask if your loan
will have a charge or a fee for paying all or part of the loan before
payment is due ("prepayment penalty"). You may be able to negotiate the
terms of the prepayment penalty.

[Lender-Required Settlement Costs]{.underline}**.** Your lender may
require you to obtain certain settlement services, such as a new survey,
mortgage insurance or title insurance. It may also order and charge you
for other settlement‑related services, such as the appraisal or credit
report. A lender may also charge other fees, such as fees for loan
processing, document preparation, underwriting, flood certification or
an application fee. You may wish to ask for an estimate of fees and
settlement costs before choosing a lender. Some lenders offer "no cost"
or "no point" loans but normally cover these fees or costs by charging a
higher interest rate.

[Comparing Loan Costs]{.underline}**.** Comparing APRs may be an
effective way to shop for a loan. However, you must compare similar loan
products for the same loan amount. For example, compare two 30-year
fixed rate loans for \$100,000. Loan A with an APR of 8.35% is less
costly than Loan B with an APR of 8.65% over the loan term. However,
before you decide on a loan, you should consider the up-front cash you
will be required to pay for each of the two loans as well.

Another effective shopping technique is to compare identical loans with
different up-front points and other fees. For example, if you are
offered two 30-year fixed rate loans for \$100,000 and at 8%, the
monthly payments are the same, but the up-front costs are different:

> Loan A - 2 points (\$2,000) and lender required costs of \$1800 =
> \$3800 in costs.
>
> Loan B - 2 1/4 points (\$2250) and lender required costs of \$1200 =
> \$3450 in costs.

A comparison of the up-front costs shows Loan B requires \$350 less in
up-front cash than Loan A. However, your individual situation (how long
you plan to stay in your house) and your tax situation (points can
usually be deducted for the tax year that you purchase a house) may
affect your choice of loans.

[Lock-ins]{.underline}. "Locking in" your rate or points at the time of
application or during the processing of your loan will keep the rate
and/or points from changing until settlement or closing of the escrow
process. Ask your lender if there is a fee to lock-in the rate and
whether the fee reduces the amount you have to pay for points. Find out
how long the lock-in is good, what happens if it expires, and whether
the lock-in fee is refundable if your application is rejected.

[Tax and Insurance Payments]{.underline}. Your monthly mortgage payment
will be used to repay the money you borrowed plus interest. Part of your
monthly payment may be deposited into an "escrow account" (also known as
a "reserve" or "impound" account) so your lender or servicer can pay
your real estate taxes, property insurance, mortgage insurance and/or
flood insurance. **Ask your lender or mortgage broker if you will be
required to set up an escrow or impound account for taxes and insurance
payments.**

[Transfer of Your Loan]{.underline}***.*** While you may start the loan
process with a lender or mortgage broker, you could find that after
settlement another company may be collecting the payments on your loan.
Collecting loan payments is often known as "servicing" the loan. Your
lender or broker will disclose whether it expects to service your loan
or to transfer the servicing to someone else.

[Mortgage Insurance]{.underline}. Private mortgage insurance and
government mortgage insurance protect the lender against default and
enable the lender to make a loan, which the lender considers a higher
risk. Lenders often require mortgage insurance for loans where the
downpayment is less than 20% of the sales price. You may be billed
monthly, annually, by an initial lump sum, or some combination of these
practices for your mortgage insurance premium. Ask your lender if
mortgage insurance is required and how much it will cost. Mortgage
insurance should not be confused with mortgage life, credit life or
disability insurance, which are designed to pay off a mortgage in the
event of the borrower's death or disability.

You may also be offered "lender paid" mortgage insurance ("LPMI"). Under
LPMI plans, the lender purchases the mortgage insurance and pays the
premiums to the insurer. The lender will increase your interest rate to
pay for the premiums \-- but LPMI may reduce your settlement costs. You
cannot cancel LPMI or government mortgage insurance during the life of
your loan. However, it may be possible to cancel private mortgage
insurance at some point, such as when your loan balance is reduced to a
certain amount. Before you commit to paying for mortgage insurance, find
out the specific requirements for cancellation.

[Flood Hazard Areas**.**]{.underline} Most lenders will not lend you
money to buy a home in a flood hazard area unless you pay for flood
insurance. Some government loan programs will not allow you to purchase
a home that is located in a flood hazard area. Your lender may charge
you a fee to check for flood hazards. You should be notified if flood
insurance is required. If a change in flood insurance maps brings your
home within a flood hazard area after your loan is made, your lender or
servicer may require you to buy flood insurance at that time.

**E. Selecting a Settlement Agent**

ettlement practices vary from locality to locality, and even within the
same county or city. Settlements may be conducted by lenders, title
insurance companies, escrow companies, real estate brokers or attorneys
for the buyer or seller. You may save money by shopping for the
settlement agent.

In some parts of the country (particularly western states), settlement
may be conducted by an escrow agent. The parties sign an escrow
agreement, which requires them to provide certain documents and funds to
the agent. Unlike other types of settlement, the parties do not meet
around a table to sign documents. Ask how your settlement will be
handled.

**F. Securing Title Services**

itle insurance is usually required by the lender to protect the lender
against loss resulting from claims by others against your new home. In
some states, attorneys offer title insurance as part of their services
in examining title and providing a title opinion. The attorney\'s fee
may include the title insurance premium. In other states, a title
insurance company or title agent directly provides the title insurance.

[Owner's Policy]{.underline}***.*** A lender's title insurance policy
**does not protect you.** Similarly, the prior owner's policy does not
protect you. If you want to protect yourself from claims by others
against your new home, you will need an owner\'s policy. When a claim
does occur, it can be financially devastating to an owner who is
uninsured. If you buy an owner\'s policy, it is usually much less
expensive if you buy it at the same time and with the same insurer as
the lender\'s policy.

[Choice of Title Insurer]{.underline}***.*** Under RESPA, the seller may
not require you, as a condition of the sale, to purchase title insurance
from any particular title company. Generally, your lender will require
title insurance from a company that is acceptable to it. In most cases
you can shop for and choose a company that meets the lender's standards.

[Review Initial Title Report]{.underline}***.*** In many areas, a few
days or weeks before the settlement or closing of the escrow, the title
insurance company will issue a "Commitment to Insure" or preliminary
report or "binder" containing a summary of any defects in title which
have been identified by the title search, as well as any exceptions from
the title insurance policy's coverage. The commitment is usually sent to
the lender for use until the title insurance policy is issued at or
after the settlement. You can arrange to have a copy sent to you (or to
your attorney) so that you can object if there are matters affecting the
title, which you did not agree to accept when you signed the agreement
of sale.

[Coverage & Cost Savings]{.underline}***.*** To save money on title
insurance, compare rates among various title insurance companies. Ask
what services and limitations on coverage are provided under each policy
so that you can decide whether coverage purchased at a higher rate may
be better for your needs. However, in many states, title insurance
premium rates are established by the state and may not be negotiable. If
you are buying a home, which has changed hands within the last several
years, ask your title company about a \"reissue rate,\" which would be
cheaper. If you are buying a newly constructed home, make certain your
title insurance covers claims by contractors. These claims are known as
"mechanics' liens" in some parts of the country.

[Survey]{.underline}. Lenders or title insurance companies often require
a survey to mark the boundaries of the property. A survey is a drawing
of the property showing the perimeter boundaries and marking the
location of the house and other improvements. You may be able to avoid
the cost of a complete survey if you can locate the person who
previously surveyed the property and request an update. Check with your
lender or title insurance company on whether an updated survey is
acceptable.

**G. RESPA Disclosures**

One of the purposes of RESPA is to help consumers become better shoppers
for settlement services. RESPA requires that borrowers receive
disclosures at various times. Some disclosures spell out the costs
associated with the settlement, outline lender servicing and escrow
account practices and describe business relationships between settlement
service providers.

[Good Faith Estimate of Settlement Costs]{.underline}***.*** RESPA
requires that, when you apply for a loan, the lender or mortgage broker
give you a Good Faith Estimate of settlement service charges you will
likely have to pay. If you do not get this Good Faith Estimate when you
apply, the lender or mortgage broker must mail or deliver it to you
within the next three business days.

Be aware that the amounts listed on the Good Faith Estimate are only
estimates. Actual costs may vary. Changing market conditions can affect
prices. Remember that the lender\'s estimate is not a guarantee. **Keep
your Good Faith Estimate so you can compare it with the final settlement
costs and ask the lender questions about any changes.**

[Servicing Disclosure Statement]{.underline}***.*** RESPA requires the
lender or mortgage broker to tell you in writing, when you apply for a
loan or within the next three business days, whether it expects that
someone else will be servicing your loan (collecting your payments).

[Affiliated Business Arrangements]{.underline}***.*** Sometimes, several
businesses that offer settlement services are owned or controlled by a
common corporate parent. These businesses are known as "affiliates."
When a lender, real estate broker, or other participant in your
settlement refers you to an affiliate for a settlement service (such as
when a real estate broker refers you to a mortgage broker affiliate),
RESPA requires the referring party to give you an Affiliated Business
Arrangement Disclosure. This form will remind you that you are generally
not required, with certain exceptions, to use the affiliate and are free
to shop for other providers.

[HUD-1 Settlement Statement]{.underline}*.* One business day before the
settlement, you have the right to inspect the HUD‑1 Settlement
Statement. This statement itemizes the services provided to you and the
fees charged to you. This form is filled out by the settlement agent who
will conduct the settlement. Be sure you have the name, address, and
telephone number of the settlement agent if you wish to inspect this
form. The fully completed HUD‑1 Settlement Statement generally must be
delivered or mailed to you at or before the settlement. In cases where
there is no settlement meeting, the escrow agent will mail you the HUD-1
after settlement, and you have no right to inspect it one day before
settlement.

[Escrow Account Operation & Disclosures]{.underline}*.* Your lender may
require you to establish an escrow or impound account to insure that
your taxes and insurance premiums are paid on time. If so, you will
probably have to pay an initial amount at the settlement to start the
account and an additional amount with each month's regular payment. Your
escrow account payments may include a "cushion" or an extra amount to
ensure that the lender has enough money to make the payments when due.
RESPA limits the amount of the cushion to a maximum of two months of
escrow payments.

At the settlement or within the next 45 days, the person servicing your
loan must give you an initial escrow account statement. That form will
show all of the payments, which are expected to be deposited into the
escrow account and all of the disbursements, which are expected to be
made from the escrow account during the year ahead. Your lender or
servicer will review the escrow account annually and send you a
disclosure each year, which shows the prior year's activity, and any
adjustments necessary in the escrow payments that you will make in the
forthcoming year.

**H. Processing Your Loan Application**

here are several federal laws, which provide you with protection during
the processing of your loan. The Equal Credit Opportunity Act ("ECOA"),
the Fair Housing Act, and the Fair Credit Reporting Act ("FCRA")
prohibit discrimination and provide you with the right to certain credit
information.

[No Discrimination]{.underline}. ECOA prohibits lenders from
discriminating against credit applicants on the basis of race, color,
religion, national origin, sex, marital status, age, the fact that all
or part of the applicant\'s income comes from any public assistance
program, or the fact that the applicant has exercised any right under
any federal consumer credit protection law. To help government agencies
monitor ECOA compliance, your lender or mortgage broker must request
certain information regarding your race, sex, marital status and age
when taking your loan application.

The Fair Housing Act also prohibits discrimination in residential real
estate transactions on the basis of race, color, religion, sex,
handicap, familial status or national origin. This prohibition applies
to both the sale of a home to you and the decision by a lender to give
you a loan to help pay for that home. Finally, your locality or state
may also have a law, which prohibits discrimination.

Frequently, there are differences in the types and amounts of settlement
costs charged to the borrower \-- for example, some borrowers are
charged greater fees for mortgages depending on their credit worthiness.
These differences may be justified or they may be unlawfully
discriminatory. It is important that you examine your settlement
documents closely, especially lines 808-811 on the HUD-1 settlement
statement, and do not hesitate to compare your settlement costs with
those of your friends and neighbors.

If you feel you have been discriminated against by a lender or anyone
else in the home buying process, you may file a private legal action
against that person or complain to a state, local or federal
administrative agency. You may want to talk to an attorney; or you may
want to ask the federal agency that enforces ECOA (the Board of
Governors of the Federal Reserve System) or the Fair Housing Act (HUD)
about your rights under these laws.

[Prompt Action/Notification of Action Taken]{.underline}. Your lender or
mortgage broker must act on your application and inform you of the
action taken no later than 30 days after it receives your
[completed]{.underline} application. Your application will not be
considered complete, and the 30-day period will not begin, until you
provide to your lender or mortgage broker all of the material and
information requested.

[Statement of Reasons for Denial]{.underline}***.*** If your application
is denied, ECOA requires your lender or mortgage broker to give you a
statement of the specific reasons why it denied your application or tell
you how you can obtain such a statement. The notice will also tell you
which federal agency to contact if you think the lender or mortgage
broker has illegally discriminated against you.

[Obtaining Your Credit Report]{.underline}***.*** The Fair Credit
Reporting Act ("FCRA") requires a lender or mortgage broker that denies
your loan application to tell you whether it based its decision on
information contained in your credit report. If that information was a
reason for the denial, the notice will tell you where you can get a free
copy of the credit report. You have the right to dispute the accuracy or
completeness of any information in your credit report. If you dispute
any information, the credit reporting agency that prepared the report
must investigate free of charge and notify you of the results of the
investigation.

[Obtaining Your Appraisal]{.underline}. The lender needs to know if the
value of your home is enough to secure the loan. To get this
information, the lender typically hires an appraiser, who gives a
professional opinion about the value of your home. ECOA requires your
lender or mortgage broker to tell you that you have a right to get a
copy of the appraisal report. The notice will also tell you how and when
you can ask for a copy.

**I. RESPA Protection Against Illegal Referral Fees**

ESPA was enacted because Congress felt that consumers needed protection
from \"\... unnecessarily high settlement charges caused by certain
abusive practices that have developed in some areas of the country.\"
Some of the practices Congress was concerned about are discussed below.
Most professionals in the settlement business provide good service and
do not engage in these practices.

[Prohibited Fees]{.underline}. It is illegal under RESPA for anyone to
pay or receive a fee, kickback or anything of value because they agree
to refer settlement service business to a particular person or
organization. For example, your mortgage lender may not pay your real
estate broker \$250 for referring you to the lender. It is also illegal
for anyone to accept a fee or part of a fee for services if that person
has not actually performed settlement services for the fee. For example,
a lender may not add to a third party's fee, such as an appraisal fee,
and keep the difference.

[Permitted Payments]{.underline}. RESPA does not prevent title
companies, mortgage brokers, appraisers, attorneys, settlement/closing
agents and others, who actually perform a service in connection with the
mortgage loan or the settlement, from being paid for the reasonable
value of their work. If a participant in your settlement appears to be
taking a fee without having done any work, you should advise that person
or company of the RESPA referral fee prohibitions. You may also speak
with your attorney or complain to a regulator listed in the Appendix to
this Booklet.

[Penalties]{.underline}. It is a crime for someone to pay or receive an
illegal referral fee. The penalty can be a fine, imprisonment or both.
You may be entitled to recover three times the amount of the charge for
any settlement service by bringing a private lawsuit. If you are
successful, the court may also award you court costs and your attorney's
fees.

**J. Your Right to File Complaints**

[Private Lawsuits]{.underline}. If you have a problem, the best place to
have it fixed is at its source (the lender, settlement agent, broker,
etc.). If that approach fails and you think you have suffered because of
a violation of RESPA, ECOA or any other law, you may be entitled to sue
in a federal or state court. This is a matter you should discuss with
your attorney.

[Government Agencies]{.underline}. Most settlement service providers are
supervised by a governmental agency at the local, state and/or federal
level, some of which are listed in the Appendix to this Booklet. Your
state's Attorney General may have a consumer affairs division. If you
feel that a provider of settlement services has violated RESPA or any
other law, you can complain to that agency or association. You may also
send a copy of your complaint to the HUD Office of Consumer & Regulatory
Affairs. The address is listed in the Appendix.

[Servicing Errors]{.underline}. If you have a question any time during
the life of your loan, RESPA requires the company collecting your loan
payments (your "servicer") to respond to you. Write to your servicer and
call it a "qualified written request under Section 6 of RESPA." A
"qualified written request" should be a separate letter and not mailed
with the payment coupon. Describe the problem and include your name and
account number. The servicer must investigate and make appropriate
corrections within 60 business days.

**III. YOUR SETTLEMENT COSTS**

**A. Specific Settlement Costs**

his part of the Booklet discusses the settlement services which you may
be required to get and pay for and which are itemized in Section L of
the HUD-1 Settlement Statement. You also will find a sample of the HUD‑1
form to help you to understand the settlement transaction.

When shopping for settlement services, you can use this section as a
guide, noting on it the possible services required by various lenders
and the different fees quoted by service providers. Settlement costs can
increase the cost of your loan, so compare carefully.

700\. [Sales/Broker\'s Commission]{.underline}: This is the total dollar
amount of the real estate broker's sales commission, which is usually
paid by the seller. This commission is typically a percentage of the
selling price of the home.

  ------------------------------------------------------ ------------ ------------
  L. SETTLEMENT CHARGES                                               

  700\. **TOTAL SALES/BROKER'S COMMISSION based on price PAID FROM    PAID FROM
  \$ @ %=**                                              BORROWER'S   SELLER'S
                                                         FUNDS AT     FUNDS AT

  *Division of Commission (line 700) as follows:*        SETTLEMENT   SETTLEMENT

  701\. \$ to                                                         

  702\. \$ to                                                         

  703\. Commission paid at Settlement                                 

  704\.                                                               
  ------------------------------------------------------ ------------ ------------

800\. [Items Payable in Connection with Loan]{.underline}: These are the
fees that lenders charge to process, approve and make the mortgage loan:

801\. Loan Origination: This fee is usually known as a loan origination
fee but sometimes is called a "point" or "points." It covers the
lender\'s administrative costs in processing the loan. Often expressed
as a percentage of the loan, the fee will vary among lenders. Generally,
the buyer pays the fee, unless otherwise negotiated.

802\. Loan Discount: Also often called \"points\" or "discount points,"
a loan discount is a one‑time charge imposed by the lender or broker to
lower the rate at which the lender or broker would otherwise offer the
loan to you. Each \"point\" is equal to one percent of the mortgage
amount. For example, if a lender charges two points on a \$80,000 loan
this amounts to a charge of \$1,600.

803\. Appraisal Fee: This charge pays for an appraisal report made by an
appraiser.

804\. Credit Report Fee: This fee covers the cost of a credit report,
which shows your credit history. The lender uses the information in a
credit report to help decide whether or not to approve your loan and how
much money to lend you.

805\. Lender\'s Inspection Fee: This charge covers inspections, often of
newly constructed housing, made by employees of your lender or by an
outside inspector. (Pest or other inspections made by companies other
than the lender are discussed in line 1302.)

806\. Mortgage Insurance Application Fee**:** This fee covers the
processing of an application for mortgage insurance.

807\. Assumption Fee: This is a fee, which is charged when a buyer
"assumes" or takes over the duty to pay the seller's existing mortgage
loan.

808\. Mortgage Broker Fee: Fees paid to mortgage brokers would be listed
here. A CLO fee would also be listed here.

  ------------------------------------------------------ -------- --------
  800\. **ITEMS PAYABLE IN CONNECTION WITH LOAN**                 

  801\. Loan Origination Fee %                                    

  802\. Loan Discount %                                           

  803\. Appraisal Fee to                                          

  804\. Credit Report to                                          

  805\. Lender's Inspection Fee                                   

  806\. Mortgage Insurance Application Fee to                     

  807\. Assumption Fee                                            

  808\. Mortgage Broker Fee                                       

  809\.                                                           

  810\.                                                           

  811\.                                                           
  ------------------------------------------------------ -------- --------

900\. [Items Required by Lender to Be Paid in Advance]{.underline}: You
may be required to prepay certain items at the time of settlement, such
as accrued interest, mortgage insurance premiums and hazard insurance
premiums.

901\. Interest: Lenders usually require borrowers to pay the interest
that accrues from the date of settlement to the first monthly payment.

902\. Mortgage Insurance Premium: The lender may require you to pay your
first year's mortgage insurance premium or a lump sum premium that
covers the life of the loan, in advance, at the settlement.

903\. Hazard Insurance Premium: Hazard insurance protects you and the
lender against loss due to fire, windstorm, and natural hazards. Lenders
often require the borrower to bring to the settlement a paid-up first
year's policy or to pay for the first year\'s premium at settlement.

904\. Flood Insurance: If the lender requires flood insurance, it is
usually listed here.

  ------------------------------------------ ------ ------ -------- --------
  900\. **ITEMS REQUIRED BY LENDER TO BE                            
  PAID IN ADVANCE**                                                 

  901\. Interest from to @\$ /day                                   

  902\. Mortgage Insurance Premium for                              
  months to                                                         

  903\. Hazard Insurance Premium for years                          
  to                                                                

  904\. years to                                                    

  905\.                                                             
  ------------------------------------------ ------ ------ -------- --------

1000 - 1008. [Escrow Account Deposits]{.underline}: These lines identify
the payment of taxes and/or insurance and other items that must be made
at settlement to set up an escrow account. The lender is not allowed to
collect more than a certain amount. The individual item deposits may
overstate the amount that can be collected. The aggregate adjustment
makes the correction in the amount on line 1008. It will be zero or a
negative amount.

  ------------------------------------------------------ -------- --------
  1000\. **RESERVES DEPOSITED WITH LENDER**                       

  1001\. Hazard Insurance months @ \$ per month                   

  1002\. Mortgage insurance months @ \$ per month                 

  1003\. City property taxes months @ \$ per month                

  1004\. County property taxes months @ \$ per month              

  1005\. Annual assessments months @ \$ per month                 

  1006\. months @ \$ per month                                    

  1007\. months @ \$ per month                                    

  1008\. Aggregate Adjustment                                     
  ------------------------------------------------------ -------- --------

1100\. [Title Charges]{.underline}: Title charges may cover a variety of
services performed by title companies and others. Your particular
settlement may not include all of the items below or may include others
not listed.

1101\. Settlement or Closing Fee: This fee is paid to the settlement
agent or escrow holder. Responsibility for payment of this fee should be
negotiated between the seller and the buyer.

1102-1104. Abstract of Title Search, Title Examination, Title Insurance
Binder: The charges on these lines cover the costs of the title search
and examination.

1105\. Document Preparation: This is a separate fee that some lenders or
title companies charge to cover their costs of preparation of final
legal papers, such as a mortgage, deed of trust, note or deed.

1106\. Notary Fee: This fee is charged for the cost of having a person
who is licensed as a notary public swear to the fact that the persons
named in the documents did, in fact, sign them.

1107\. Attorney\'s Fees: You may be required to pay for legal services
provided to the lender, such as an examination of the title binder.
Occasionally, the seller will agree in the agreement of sale to pay part
of this fee. The cost of your attorney and/or the seller's attorney may
also appear here. If an attorney\'s involvement is required by the
lender, the fee will appear on this part of the form, or on lines 1111,
1112 or 1113.

1108\. Title Insurance: The total cost of owner\'s and lender\'s title
insurance is shown here.

1109\. Lender\'s Title Insurance: The cost of the lender's policy is
shown here.

1110\. Owner\'s (Buyer's) Title Insurance: The cost of the owner\'s
policy is shown here.

  ------------------------------------------------------ -------- --------
  1100\. **TITLE CHARGES**                                        

  1101\. Settlement or closing fee to                             

  1102\. Abstract or title search to                              

  1103\. Title examination to                                     

  1104\. Title insurance binder to                                

  1105\. Document preparation to                                  

  1106\. Notary fees to                                           

  1107\. Attorney's fees to                                       

  *(includes above items numbers; )*                              

  1108\. Title Insurance to                                       

  *(includes above items numbers; )*                              

  1109\. Lender's coverage \$                                     

  1110\. Owner's coverage \$                                      

  1111\.                                                          

  1112\.                                                          

  1113\.                                                          
  ------------------------------------------------------ -------- --------

1200\. [Government Recording and Transfer Charges]{.underline}: These
fees may be paid by you or by the seller, depending upon your agreement
of sale with the seller. The buyer usually pays the fees for legally
recording the new deed and mortgage (line 1201). Transfer taxes, which
in some localities are collected whenever property changes hands or a
mortgage loan is made, can be quite large and are set by state and/or
local governments. City, county and/or state tax stamps may have to be
purchased as well (lines 1202 and 1203).

  ------------------------------------------------------ -------- --------
  1200\. **GOVERNMENT RECORDING AND TRANSFER CHARGES**            

  1201\. Recording fees: Deed \$ ; Mortgage \$ ;                  
  Releases \$                                                     

  1202\. City/county tax/stamps: Deed \$ ; Mortgage \$            

  1203\. State tax/stamps: Deed \$ ; Mortgage \$                  

  1204\.                                                          

  1205\.                                                          
  ------------------------------------------------------ -------- --------

1300\. [Additional Settlement Charges]{.underline}:

1301\. Survey: The lender may require that a surveyor conduct a property
survey. This is a protection to the buyer as well. Usually the buyer
pays the surveyor\'s fee, but sometimes this may be paid by the seller.

1302\. Pest and Other Inspections: This fee is to cover inspections for
termites or other pest infestation of your home.

1303-1305. Lead-Based Paint Inspections: This fee is to cover
inspections or evaluations for lead-based paint hazard risk assessments
and may be on any blank line in the 1300 series.

  ------------------------------------------------------ -------- --------
  1300\. **ADDITIONAL SETTLEMENT CHARGES**                        

  1301\. Survey to                                                

  1302\. Pest inspection to                                       

  1303\.                                                          

  1304\.                                                          

  1305\.                                                          
  ------------------------------------------------------ -------- --------

1400\. [Total Settlement Charges]{.underline}: The sum of all fees in
the borrower\'s column entitled \"Paid from Borrower\'s Funds at
Settlement\" is placed here. This figure is then transferred to line 103
of Section J, \"Settlement charges to borrower\" in the **Summary of
Borrower\'s Transaction** on page 1 of the HUD‑1 Settlement Statement
and added to the purchase price. The sum of all of the settlement fees
paid by the seller are transferred to line 502 of Section K, **Summary
of Seller\'s Transaction** on page 1 of the HUD‑1 Settlement Statement.

### 

  ------------------------------------------------------ -------- --------
  1400\. **TOTAL SETTLEMENT CHARGES** *(enter on lines            
  103, Section J and 502, Section K)*                             

  ------------------------------------------------------ -------- --------

[Paid Outside Of Closing ("POC"):]{.underline} Some fees may be listed
on the HUD-1 to the left of the borrower's column and marked "P.O.C."
Fees such as those for credit reports and appraisals are usually paid by
the borrower before closing/settlement. They are additional costs to
you. Other fees such as those paid by the lender to a mortgage broker or
other settlement service providers may be paid after closing/settlement.
These fees are usually included in the interest rate or other settlement
charge. They are not an additional cost to you. These types of fees will
not be added into the total on Line 1400.

**B. Calculating the Amount You Need At Settlement**

he first page of the HUD-1 Settlement Statement summarizes all the costs
and adjustments for the borrower and seller. Section J is the summary of
the borrower's transaction and Section K is the summary of the seller's
side of the transaction. You may receive a copy of the seller's side,
but it is not required.

Section 100 summarizes the borrower's costs, such as the contract cost
of the house, any personal property being purchased, and the total
settlement charges owed by the borrower from Section L.

Beginning at line 106, adjustments are made for items (such as taxes,
assessments, fuel) that the seller has previously paid. If you will
benefit from these items after settlement, you will usually repay the
seller for that portion of the cost.

Here is an example for you to use in making your own calculations:

  ---------------- ----------------------------------------------------- ---------------- --
                                                                                          

  **J. SUMMARY OF                                                                         
  BORROWER\'S                                                                             
  TRANSACTION**                                                                           

  **100. GROSS                                                                            
  AMOUNT DUE FROM                                                                         
  BORROWER:**                                                                             

  101\. Contract                                                         **100,000.00**   
  sales price                                                                             

  102\. Personal                                                                          
  Property                                                                                

  103\. Settlement                                                       **4,000.00**     
  charges to                                                                              
  borrower (line                                                                          
  1400)                                                                                   

  104\.                                                                                   

  105\.                                                                                   

  ***Adjustments                                                                          
  for items paid                                                                          
  by seller in                                                                            
  advance***                                                                              

  106\. City/town                                                                         
  taxes to                                                                                

  107\. County                                                                            
  taxes to                                                                                

  108\.                                                                  **40.00**        
  Assessments                                                                             
  **6/30** to                                                                             
  **7/31 (owners                                                                          
  assn.)**                                                                                

  109\. **Fuel Oil                                                       **25.00**        
  25 gals. @                                                                              
  \$1.00/gal.**                                                                           

  110\.                                                                                   

  111\.                                                                                   

  112\.                                                                                   

  **120. GROSS                                                           **104,065.00**   
  AMOUNT DUE FROM                                                                         
  BORROWER**                                                                              
  ---------------- ----------------------------------------------------- ---------------- --

*Assume in this example, the cost of the house is \$100,000 and the
borrower's total settlement charges brought from Line 1400 of Section L
are \$4,000. Assume that the settlement date is July 1. Here the
borrower has agreed to pay the seller for the \$40 Home Owners
Association dues that have been paid for the month of July and for the
25 gallons of fuel oil left in the tank. This is added for a gross
amount due from the borrower of \$104,065.*

Section 200 lists the amount paid by the borrower or on behalf of the
borrower. This will include the deposit of earnest money you put down
with the agreement of sale, the loan(s) you are getting and any loan you
may be assuming.

Beginning at Line 210, adjustments are made for items that the seller
owes (such as taxes, assessments) but for which you as the borrower will
pay after settlement. The seller will usually pay you or credit you this
portion at settlement.

  ------------------------------------------------------- ---------------
  **200. AMOUNTS PAID BY OR IN BEHALF OF BORROWER:**      

  201\. Deposit of earnest money                          **2,000.00**

  202\. Principal amount of new loan(s)                   **80,000.00**

  203\. Existing loan(s) taken subject to                 

  204\.                                                   

  205\.                                                   

  206\.                                                   

  207\.                                                   

  208\.                                                   

  209\.                                                   

  ***Adjustments for items unpaid by seller***            

  210\. City/town taxes to                                

  211\. County taxes **1/1 to 6/30 \$1,200/ year**        **600.00**

  212\. Assessments **1/1 to 6/30 \$200/yr.**             **100.00**

  213\.                                                   

  214\.                                                   

  215\.                                                   

  216\.                                                   

  217\.                                                   

  218\.                                                   

  219\.                                                   

  **220. TOTAL PAID BY/FOR BORROWER**                     **82,700.00**

                                                          
  ------------------------------------------------------- ---------------

*In this example, assume the borrower paid an earnest deposit of \$2,000
and is getting a loan for \$80,000. A tax of \$1200 and an assessment of
\$200 are due at the end of the year. The seller will pay the borrower
for six months or one-half of this amount. Line 220 shows the total
\$82,700 to be paid by or for the borrower.*

Section 300 reflects the difference between the gross amount due from
the borrower and the total amount paid by/for the borrower. Generally,
line 303 will show the amount of cash the borrower must bring to
settlement.

  ------------------------------------------------------- -----------------
  **300. CASH AT SETTLEMENT FROM/TO BORROWER**            

  301\. Gross Amount due from borrower (line 120)         **104,065.00**

  302\. Less amounts paid by/for borrower (line 220)      **(82,700.00)**

  **303. CASH ( FROM) ( r TO) BORROWER**                 **21,365.00**
  ------------------------------------------------------- -----------------

*In this example, the borrower must bring \$21,365.00 to settlement.*

**C. Adjustments To Costs Shared By Buyer and Seller**

t settlement it is usually necessary to make an adjustment between buyer
and seller for property taxes and other expenses. The adjustments
between buyer and seller are shown in Sections J and K of the HUD‑1
Settlement Statement. In the example given above, the taxes, which are
payable annually, had not yet been paid when the settlement occurs on
July 1. The borrower will have to pay a whole year\'s taxes on the
following December 1. However, the seller lived in the house for the
first six months of the year. Thus, one ­half of the year\'s taxes are to
be paid by the seller. Accordingly, lines 211 and 511 on the HUD‑1
Settlement Statement would read as follows:

  --------------------------- ---------- -- -------------------------- ----------
  211\. County taxes 1/1/97   \$600.00      511\. County taxes 1/1/97  \$600.00
  to 6/30/97                                to 6/30/97                 

  --------------------------- ---------- -- -------------------------- ----------

The borrower is given credit for this amount at the settlement and the
seller will pay this amount or count it as a deduction from sums payable
to the seller.

Similar adjustments are made for homeowner association dues, special
assessments, and fuel and other utilities, although the billing periods
for these may not always be on an annual basis. Be sure you work out
these cost sharing arrangements or "prorations" with the seller before
the settlement. you may wish to notify utility companies of the change
in ownership and ask for a special reading on the day of settlement,
with the bill for pre-settlement charges to be mailed to the seller at
his or her new address or to the settlement agent. This will eliminate
much confusion that can result if you are billed for utilities used when
the seller owned the property.

### D. HUD-1 Settlement Statement

  ----------------- ----- ------------- -------------- ----------- ------------ -------------
  **A.** **U.S.                                                                 
  DEPARTMENT OF                                                                 
  HOUSING AND URBAN                                                             
  DEVELOPMENT**                                                                 
  **SETTLEMENT                                                                  
  STATEMENT**                                                                   

  **B. TYPE OF                                         6\. File                 7\. Loan
  LOAN**                                               Number                   Number

                    1\.                2\.  FmHA                              
                    FHA                                                         

  3\.  CONV.       4\.                5\.  CONV.    8\.                      
  UNINS.            VA                  INS.           Mortgage                 
                                                       Insurance                
                                                       Case Number              

  *C. NOTE: This                                                                
  form is furnished                                                             
  to give you a                                                                 
  statement of                                                                  
  actual settlement                                                             
  costs. Amounts                                                                
  paid to and by                                                                
  the settlement                                                                
  agent are shown.                                                              
  Items marked                                                                  
  "(p.o.c.)" were                                                               
  paid outside the                                                              
  closing; they are                                                             
  shown here for                                                                
  informational                                                                 
  purposes and are                                                              
  not included in                                                               
  the totals.*                                                                  

  D. NAME AND             E. NAME AND                              F. NAME AND  
  ADDRESS OF              ADDRESS OF                               ADDRESS OF   
  BORROWER:               SELLER:                                  LENDER:      

  G. PROPERTY             H. SETTLEMENT                                         
  LOCATION:               AGENT: NAME,                                          
                          AND ADDRESS                                           

                          PLACE OF                                 I.           
                          SETTLEMENT:                              SETTLEMENT   
                                                                   DATE:        
  ----------------- ----- ------------- -------------- ----------- ------------ -------------

  --------------------------- ------- -- -------------------------- -------
  **J. SUMMARY OF BORROWER'S             **K. SUMMARY OF SELLER'S   
  TRANSACTION**                          TRANSACTION**              

  100\. **GROSS AMOUNT DUE               400\. **GROSS AMOUNT DUE   
  FROM BORROWER:**                       TO SELLER:**               

  101\. Contract sales price             401\. Contract sales price 

  102\. Personal property                402\. Personal property    

  103\. Settlement charges to            403\.                      
  borrower(line 1400)                                               

  104\.                                  404\.                      

  105\.                                  405\.                      

  *Adjustments for items paid            *Adjustments for items     
  by seller in advance*                  paid by seller in advance* 

  106\. City/town taxes to               406\. City/town taxes to   

  107\. County taxes to                  407\. County taxes to      

  108\. Assessments to                   408\. Assessments to       

  109\.                                  409\.                      

  110\.                                  410\.                      

  111\.                                  411\.                      

  112\.                                  412\.                      

  120\. **GROSS AMOUNT DUE               420\. **GROSS AMOUNT DUE   
  FROM BORROWER**                        TO SELLER**                
  --------------------------- ------- -- -------------------------- -------

  --------------------------- ------- -- -------------------------- -------
  200\. **AMOUNTS PAID BY OR             500\. **REDUCTIONS IN      
  IN BEHALF OF BORROWER:**               AMOUNT DUE TO SELLER:**    

  201\. Deposit of earnest               501\. Excess deposit (see  
  money                                  instructions)              

  202\. Principal amount of              502\. Settlement charges   
  new loan(s)                            to seller (line 1400)      

  203\. Existing loan(s)                 503\. Existing loan(s)     
  taken subject to                       taken subject to           

  204\.                                  504\. Payoff of first      
                                         mortgage loan              

  205\.                                  505\. Payoff of second     
                                         mortgage loan              

  206\.                                  506\.                      

  207\.                                  507\.                      

  208\.                                  508\.                      

  209\.                                  509\.                      

  *Adjustments for items                 *Adjustments for items     
  unpaid by seller*                      unpaid by seller*          

  210\. City/town taxes to               510\. City/town taxes to   

  211\. County taxes to                  511\. County taxes to      

  212\. Assessments to                   512\. Assessments to       

  213\.                                  513\.                      

  214\.                                  514\.                      

  215\.                                  515\.                      

  216\.                                  516\.                      

  217\.                                  517\.                      

  218\.                                  518\.                      

  219\.                                  519\.                      

  220\. **TOTAL PAID BY/FOR              520\. **TOTAL REDUCTION    
  BORROWER**                             AMOUNT DUE SELLER**        
  --------------------------- ------- -- -------------------------- -------

  --------------------------- ------- -- -------------------------- -------
  300\. **CASH AT SETTLEMENT             600\. **CASH AT SETTLEMENT 
  FROM/TO BORROWER**                     TO/FROM SELLER**           

  301\. Gross amount due from            601\. Gross amount due to  
  borrower(line 120)                     seller (line 420)          

  302\. Less amounts paid                602\. Less reductions in   
  by/for borrower(line 220)              amount due seller (line    
                                         520)                       

  303\. **CASH ( FROM) (               603\. **CASH ( TO) (     
  TO) BORROWER**                         FROM) SELLER**             
  --------------------------- ------- -- -------------------------- -------

  ------------------------------------------------------ ------------ ------------ --------
  L. SETTLEMENT CHARGES                                                            

  700\. **TOTAL SALES/BROKER'S COMMISSION based on price PAID FROM    PAID FROM    
  \$ @ %=**                                              BORROWER'S   SELLER'S     
                                                         FUNDS AT     FUNDS AT     

  *Division of Commission (line 700) as follows:*        SETTLEMENT   SETTLEMENT   

  701\. \$ to                                                                      

  702\. \$ to                                                                      

  703\. Commission paid at Settlement                                              

  704\.                                                                            

  800\. **ITEMS PAYABLE IN CONNECTION WITH LOAN**                                  

  801\. Loan Origination Fee %                                                     

  802\. Loan Discount %                                                            

  803\. Appraisal Fee to                                                           

  804\. Credit Report to                                                           

  805\. Lender's Inspection Fee                                                    

  806\. Mortgage Insurance Application Fee to                                      

  807\. Assumption Fee                                                             

  808\.                                                                            

  809\.                                                                            

  810\.                                                                            

  811\.                                                                            

  900\. **ITEMS REQUIRED BY LENDER TO BE PAID IN                                   
  ADVANCE**                                                                        

  901\. Interest from to @\$ /day                                                  

  902\. Mortgage Insurance Premium for months to                                   

  903\. Hazard Insurance Premium for years to                                      

  904\. years to                                                                   

  905\.                                                                            

  1000\. **RESERVES DEPOSITED WITH LENDER**                                        

  1001\. Hazard Insurance months @ \$ per month                                    

  1002\. Mortgage insurance months @ \$ per month                                  

  1003\. City property taxes months @ \$ per month                                 

  1004\. County property taxes months @ \$ per month                               

  1005\. Annual assessments months @ \$ per month                                  

  1006\. months @ \$ per month                                                     

  1007\. months @ \$ per month                                                     

  1008\. Aggregate Adjustment months @ \$ per month                                

  1100\. **TITLE CHARGES**                                                         

  1101\. Settlement or closing fee to                                              

  1102\. Abstract or title search to                                               

  1103\. Title examination to                                                      

  1104\. Title insurance binder to                                                 

  1105\. Document preparation to                                                   

  1106\. Notary fees to                                                            

  1107\. Attorney's fees to                                                        

  *(includes above items numbers; )*                                               

  1108\. Title Insurance to                                                        

  *(includes above items numbers; )*                                               

  1109\. Lender's coverage \$                                                      

  1110\. Owner's coverage \$                                                       

  1111\.                                                                           

  1112\.                                                                           

  1113\.                                                                           

  1200\. **GOVERNMENT RECORDING AND TRANSFER CHARGES**                             

  1201\. Recording fees: Deed \$ ; Mortgage \$ ;                                   
  Releases \$                                                                      

  1202\. City/county tax/stamps: Deed \$ ; Mortgage \$                             

  1203\. State tax/stamps: Deed \$ ; Mortgage \$                                   

  1204\.                                                                           

  1205\.                                                                           

  1300\. **ADDITIONAL SETTLEMENT CHARGES**                                         

  1301\. Survey to                                                                 

  1302\. Pest inspection to                                                        

  1303\.                                                                           

  1304\.                                                                           

  1305\.                                                                           

  1400\. **TOTAL SETTLEMENT CHARGES** *(enter on lines                             
  103, Section J and 502, Section K)*                                              
  ------------------------------------------------------ ------------ ------------ --------

**Consumer Information on Home Purchasing and Related Topics**

**U.S. Department of Housing and Urban Development**

**451 7th Street, SW**

**Washington, DC 20410**

**Web site: http://www.hud.gov**

For information about FHA‑insured home mortgage loans on one‑to‑four
family dwellings call:

1-800 CALL FHA (800-225-5342)

For consumer counseling referrals call:

1-800-569-4287

For information regarding housing discrimination issues contact:

Office of Fair Housing and Equal Opportunity (see above HUD address)

1-800-669-9777

Web site: http://www.hud.gov/fhe/fheo.html

For information about RESPA contact:

Office of Consumer and Regulatory Affairs (see above HUD address)

Web Site: http://www.hud.gov/fha/res/respa_hm.html

**Other Agencies**

For information about programs and pamphlets offered by the Department
of Veterans Affairs, contact the nearest VA Regional Office.

Web Site: http://www.va.gov/vas/loan

For information about rural housing loan programs contact:

Department of Agriculture

Rural Development/Rural Housing Services

Stop 0783

Washington, DC 20250

Web Site: http://www.rurdev.usda.gov

For information about the Truth in Lending Act and

the Equal Credit Opportunity Act contact:

Federal Reserve Board

20th Street and Constitution Avenue, NW

Washington, DC 20551

http://www.bog.frb.fed.us