August 17, 2010
The Department of Veterans Affairs announced new requirements concerning closing costs on the HUD-1 for loan applications taken on or after October 1, 2010. Lenders must itemize certain credits and title service charges. The itemization of credits and title charges can be combined with the required VA origination statement.
Itemization can be accomplished by providing an attachment to the HUD-1 and will enable VA reviewers to determine who paid what charges and to ensure veteran borrowers did not pay unallowable fees. The attachment may be a lender-created addendum or any standard addendum used by title companies. For title services and lender’s title insurance, lenders will now be required to provide a breakout of the charges shown on line 1101, similar to the breakout required of line 801. More information is available in Circular 26-10-9 dated July 30, 2010 and the updated Circular dated August 6, 2010.