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Introduction to using Power Closer 4

... the 2010 HUD-1 form

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See also: 

Prospective purchasers see: Power Closer 

Setting up Power Closer 4

When you first install Power Closer 4, verify that all users can see all closings. Set up printers. Verify that database backup is working.  Verify that the monitor resolution is at least 1024 x 768. For more, see Installing the update from Power Closer 3 to 4

About the 2010 RESPA rule

When to use the 2010 HUD-1 or the old HUD-1

The 2010 HUD-1 form is only required when the lender has or should have issued a new, three-page Good Faith Estimate (GFE) for the closing.

The HUD-1A form

Argosy Legal Systems has not decided to implement the 2010 HUD-1A form. Customers who have tried the HUD-1A have reported that they no longer use it. HUD-1A does not contain the 200 section, which is needed under the 2010 rule, sometimes unpredictabely. It is not clear how to lay out the page in a way that information fits properly and legibly.  HUD as indicated that if you cannot make information fit on the HUD-1A, then use the HUD-1 form. We are open to customer feedback.

Certain charges not allowed in the seller's column

RESPA does not permit charges that have been estimated in the Good Faith estimate to be shown in the Seller's column on page 2 of the HUD-1 form. If the seller is responsible for such charges, RESPA describes how to handle this by offsetting a credit to the borrower and a charge to the seller on a line in the 200/500 sections on page 1.

Power Closer 4's new interface features

New color codes: Turquoise and Pink

Screens have changed a little in Power Closer 4 by addition of color codes. 

  • Light Turquoise indicates a data entry field that can be tabbed into. 

  • Dark Turquoise can be clicked on.

  • Pink suggests that caution may be appropriate.

The new columns for GFE, Section and Group

Beginning with the 800 section, the screens for Page 2 of the HUD-1 have three new columns on the right, as follows: 

The GFE column is for entering estimated amounts from Page 2 of the 2010 Good Faith Estimate document. Enter each estimated amount on the line that is to contain the corresponding actual charge. The individual estimated amounts for GFE 3, 6 and 11 must be entered here to complete the comparison chart on page 3. The other GFE amounts can be entered either here or in the GFE data chart on the 700 section screen.

In the Section column, Sections "A", "B" and "C" correspond to the first (Cannot change), second (Can change up to 10%), and third (Can Change/Shopped) sections of the Comparison Chart on page 3 of the HUD-1.

The Group column involves a feature you may rarely need. Suppose you have an appraisal fee on line 804, with a GFE estimated amount on that line. You also have a second appraisal fee on line 810, and a third appraisal fee on line 811, but no GFE amounts there. You want lines 804, 810 and 811 to show up next to each other in the comparison chart. To do that, enter an amount in the Borrower column, a "3" in the GFE # column, a "B" in the Section column and a "1" in the Group column on each of the lines 804, 810 and 811. The comparison chart is generated automatically.

Left-of-column amounts

The 2010 HUD-1 form has dollar signs and amount fields for left-of-column amounts in the mid region of certain lines in the 1100 section and in the 1300 section. Amounts entered on these lines are automatically assigned as GFE # 4 in the 1100 section or GFE #6 in the 1300 section, and included in the totals on line 1101 or 1301. 

If you want to enter an amount that is not automatically assigned as GFE #4 or GFE #6, then enter the amount directly in the borrower's column or, if appropriate, in the seller's column, rather than left of column.

Entering GFE data

Create or open a closing in Power Closer (select File | New or Open) and go to the 700's Section, which contains a GFE data chart. 

Turn to Page 2 of the GFE that was given to the borrower, and copy the fourteen amounts that appear in the right hand column into Power Closer's GFE data chart. (Note: The RESPA rule requires that the settlement agent, and not the lender, prepare the comparison chart based on the information contained in the GFE. The rule requires the lender to provide this information to the settlement agent. It may be appropriate to request that it be faxed if it is not already included with your loan instructions.)

When you have completed the GFE data chart, three of the six checkboxes on this screen should be checked. The remaining three checkboxes will be checked when you have entered the individual estimated amounts from the left side of GFE Blocks 3, 6 and 11 into the appropriate lines in the range 804 through 1310 on the following screens.

The six checkboxes in the GFE data chart are automatically checked when the GFE amounts add up properly. If you cannot get all the checkboxes to be checked, press the Analyze button to generate a report that explains discrepancies.

The Analyze button generates a report that explains in bold text any discrepancies in how GFE amounts add up. It shows the individual amounts included in each total, together with the total as entered, and the total as calculated. Use this information to correct any GFE data entry errors.

Un-itemized fees included in line 1101

Certain charges in the 1100 section must be itemized, but not all charges are required to be itemized. If you need to include an amount in the borrower's column on line 1101 that is collected by the settlement agent listed in Block H on Page 1 of the HUD-1 form, but that is not intended to be itemized left of column in the 1100 section, then you can enter this un-itemized amount on line 1100. It will be included in the total, but not itemized left of column.

Splitting line 1101 in the comparison chart

HUD guidelines permit the borrower to shop for the Lender's title insurance and related services, or for the Settlement or closing fee, but not both, and to show these two categories in different sections of the comparison chart. 1101 may only be split into those categories. Each category must be, as a whole, either shopped or not shopped.

To do this, check the checkbox below line 1113. Then enter the GFE estimated amounts for (1) lender's title insurance, and (2) settlement/closing services, and assign the shopped portion to section C. Assign the estimated charges on each HUD line to  comparison section B or C as appropiate. To assign the unitemized amount on line 1100 to a comparison section, set the section for line 1101. New with Power Closer 4.0.18.

Credit on line 204/205 to cure tolerance violation

Lines 204 and 205 can be designated to appear as a credit in section A or Section B of the Comparison chart. For example, this can be appropriate if the line is for "Cure for 10% tolerance." Do this by designating the Comparison section (A, or B) in which the credit is to appear. New with Power Closer 4.0.20.

Built in Help

Press F-1 on any screen for context-sensitive help. Help for the new Power Closer 4 features is included beginning with Power Closer 4.0.23.

See also: 

Prospective purchasers see: Power Closer