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Settlement Cost Booklet

What is a Settlement Cost Booklet?

Settlement Cost Booklet

Settlement Cost Booklet is an informational booklet that helps the borrowers become familiar with the home-buying and mortgage process so that they make informed decisions and avoid common pitfalls. It includes topics such as steps in buying a home, mortgage process, fees, disclosures, understanding GFE and HUD-1, and other information.

Settlement Cost Booklet was last updated by US Department of Housing and Urban Development (HUD) in August 17, 2010.

The lender is required to provide a special information booklet as per §1024.6 Regulation X, which implements Real Estate Settlement Procedures Act (RESPA). Regulation X and provisions of RESPA are enforced by Consumer Finance Protection Bureau (CFPB). Settlement Cost Booklet is the special information booklet designed by HUD to meet the requirements of Regulation X.


Borrower's Consideration

Use it as a General Guide

The booklet is a good place to start for first time homebuyers and those looking to refinance. It provides a general overview of the process for buying a home and obtaining a mortgage loan. You will get familiar with some of the documents and disclosures. However, the guide is a general purpose document. You should work with your real estate agent and loan originator to understand the loan terms, fees, disclosures, and important steps in the process that allow to your particular circumstance.


Lender's Consideration

For Which Loans Do You Need to Send the Booklet?

You are required to provide the booklet for closed end first lien mortgage loans where the loan purpose is to purchase a 1 to 4 family residential property. In other words, send the booklet for loan applications when the following conditions are met:

  1. The property type is 1-4 family residence. It includes PUD, condo, townhome, manufactured home, mobile home, etc.
  2. The loan purpose is purchase
  3. Loan is a first lien loan
  4. The loan type is closed-end loan. There is a separate booklet for open-ended loans


Regulation X provides the following exceptions where you are not required to provide the booklet:

  1. Refinance transaction
  2. Closed-end loans where the lender is taking a subordinate lien, such as second lien loans.
  3. Reverse mortgages
  4. Any other mortgage loan whose purpose is not the purchase of a 1- to 4-family residential property

Timing for Delivery – 3 Business Day Rule

Regulation X requires you to deliver or place the booklet in the mail not later than three business days following receipt of the loan application. If you deny the loan application before the end of the three-business-day period, then you need not provide the booklet to the borrower. Business day means a day on which your offices are open to the public for carrying on substantially all of its business functions.

Brokered Loans

If the borrower is using a broker then the broker is required to send the booklet. In that case, you are not required to send the booklet and you can rely on the broker. However, you run the risk of non-compliance if the broker is not able to provide evidence of the delivery of the booklet. Therefore, we recommend sending the booklet yourself for all loans, irrespective of whether the broker is sending the booklet or not.


Customizing the Booklet

Do not make any changes to the content of the booklet. The only change allowed is to replace HUD’s name and address with that of CFPB. See the specific requirements of Regulation X before making any changes.


Regulation X gives you few options for reproducing the form.

  • You can provide the booklet in any form such as in a printed form, a PDF document, or a Word document.
  • The booklet should be in a document that is separate from any other document or disclosure.
  • You can use any color, size and quality of paper, type of print, and method of reproduction may be used so long as the booklet is clearly legible.
  • The booklet can be translated to other languages.
  • You may include your names, addresses and telephone numbers or similar information on the cover, but do not include any other information that is covered in the booklet.
  • The cover of the booklet can be in any form and may contain any drawings, pictures or artwork, provided that the words “settlement costs” are used in the title.

Evidencing the Delivery of Settlement Cost Booklet

An important question is how to evidence the delivery of the Booklet? There are various ways in which you can accomplish that:

  1. Applicant's Acknowledgement of Receipt: You may as ask the borrower to send you an acknowledgement that he/she has received the booklet within three business days from receipt of loan application. Ideally, you should use one letter to acknowledge the delivery of all initial disclosures such as TIL, ARM disclosure, etc.
  2. System Log: If you are sending the booklet electronically then your system may log a memo or record of mailing. This would be an appropriate form of documentation.
  3. Checklist: You can prepare an internal checklist, for each file, where the loan processor or loan originator checks the list of documents sent at the time of application. This is a weaker form of evidence of delivery as compared to borrower’s acknowledgement.
  4. Copy of Booklet in Loan File: Some lenders keep a copy of the Booklet, along with a date stamp, in the loan application as evidence of delivery of disclosure. This is not an ideal method and creates difficulties when imaging loan documents.

For brokered loans, do not rely on the mortgage broker to send the disclosure on your behalf. You are responsible for ensuring compliance.


Record Retention

We recommend maintaining the evidence of delivery of booklet in the loan file for a period of at least five years from the date of settlement. The document retention period will be consistent with other record-keeping requirements of Regulation X. For declined, cancelled, or withdrawn applications, the evidence of delivery should be maintained for as long as the loan application file is maintained, which would normally be at least 25 months from date of action taken to be consistent with Regulation B recordkeeping requirements.


Document Summary

Settlement Cost Booklet
Settlement Cost Booklet is an informational booklet that helps the borrowers become familiar with the home-buying and mortgage process so that they make informed decisions and avoid common pitfalls.
Use in Mortgages
The booklet helps borrowers get a basic understanding of the mortgage process, disclosures, and fees.
Other Names
  • Settlement Cost Booklet
  • Settlement Costs Booklet
  • Special Information Booklet
  • Settlement Booklet
  • Shopping for Your Home Loan – HUD’s Settlement Cost Booklet
Provided By
Provided To
Notarization Required
Signed By
Life Cycle Stage
We recommend the lender should be able to demonstrate the delivery of the Booklet for at least five years from date of settlement.
Model Form
Yes. Prescribed by Regulation X and developed by HUD as the Settlement Cost Booklet.
Applicable Laws
CFPB Regulation X, 12 CFR 1024.6

Updated: Oct 20, 2013


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