Legal 3170 Proration Questions for Settlement Closing Statement Preparation Indi
ID: 2589540 • Letter: L
Question
Legal 3170 Proration Questions for Settlement Closing Statement Preparation Indicate where the following entries would be located on the Hud-1 Settlement statement. Also indicate whether they would be a debit or a credit and to who. 1. Purchase price 2. New First Mortgage 3. Taxes Arrears 4. Taxes in Advance 5. Commission 6. Recording of Deed 7. Preparation of Deed 8. Earnest Money deposit 9. Second Mortgage Pay-off 10. Second Mortgage-purchase money mortgage 11. Title insurance 12. Closing cost for buyer and seller I property that buyer purchased from sellerExplanation / Answer
1. Purchase price - Purchase is shown as the debit to the buyer in section 100 line no. 101. This is the price for the property sought to be purchased against loan.
2. New First Mortgage - New First mortgage is shown as the credit to the buyer in section 200, line no. 202.
3. Taxes Arrears - Arrears in the taxes are shown as the debits or charges to the seller in section 500 from line number 510 - 519.
4. Taxes in advance - Taxes paid inadvance are the prepaid taxes and the same are shown as credits to the seller in section 400, line number 406- 416.
5. Commission - Commission is dependent on who is paying and therefore will be shown separately in section 700 of Settlement Charges (Section L). If it is payable by the buyer, then it is shown in line 103 of section 100 as debit to the buyer. If it is payable by seller, then it is shown in line 502 in section 500 as debit to seller.
6. Recording of Deeds- It is also dependent on who is paying and therefore will be shown separately in section 1200 of Settlement Charges (Section L). If it is payable by the buyer, then it is shown in line 103 of section 100 as debit to the buyer. If it is payable by seller, then it is shown in line 502 in section 500 as debit to seller.
7. NA
8. Earnest Money deposit - It is shown as the credit to the buyer in line number 201 section 200.
9. Second Mortgage Payoff - It is shown in line number 505 of section 500 as the debit or charges to the seller.
10. NA
11. Title Insurance - Titlle Insurance is shown in section 1100 of settlement charges (Section L) and then the total settlement charges are shown as the debot to buyer in line number 103 of section 100.
12. Closing Cost for buyer and seller - Closing cost paid by the seller for buyer is shown as the credit to buyer in section 200 from line 203-209. This amount is also shown as the charge ot debit to the seller in section 500 from line 503 -509.
13. Personal property from buyer to seller - Such amount is shown as debit to buyer in line 102 of section 100. This amount is also shown as credits due the Seller in section 400 line number 402.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.