Attention! New Additions to What HUD Considers Settlement Service Mean Changes In Escrow Procedures

As I have mentioned many times, my goal at RE-Insider is to keep real estate buyers and, well, the real estate community at large informed on events which impact consumers purchasing houses in the California marketplace.   To follow my investigations or to submit your own ideas for investigations visit me at

HUD recently made additions to the list of official settlement services, covered by RESPA, according to Barton Shapiro, HUD Deputy Director of RESPA and land sales, to now include services such as natural hazard disclosure reports.

Now that natural hazard disclosure statements are included on the list of official settlement services:

  1. The cost of natural hazard disclosure must be included on  HUD1 forms
  2. Natural Hazard Disclosure statements must be paid for before escrow closes

We at are thrilled about this news.  We have long felt that HUD rules often left open loopholes that could be exploited to take advantage of the buyer, especially in the lack of clarity around the naming of settlement services.  By closing this inadvertent loophole, HUD strengthens its role as protector of the consumer.

I highly recommend you take a look at the copy of the HUD memo clarifying settlement services: