How must settlement fees and charges related to a loan transaction be recorded on the HUD-1 Settlement Statement?

Settlement fees and charges related to a loan transaction must be recorded on the HUD-1 Settlement Statement as actual dollar amounts. This requirement ensures transparency for all parties involved in the transaction, allowing borrowers to clearly understand how much they are paying in settlement costs. The HUD-1 form provides a detailed breakdown of all fees associated with the closing of the loan, which includes costs for services such as title insurance, appraisal fees, and other closing costs.

Using actual dollar amounts rather than estimates is crucial because it helps prevent misunderstandings or disputes regarding what exactly the borrower is responsible for financially. It aligns with the regulations established to protect consumers in mortgage transactions, ensuring that they are fully informed of their financial obligations. This practice fosters trust and accountability in the lending process.