Academic journal article ABA Banking Journal

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Academic journal article ABA Banking Journal

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Article excerpt

To Sign, Or Not To Sign, Is The Question

Q. Does a borrower have to sign the HUD-1 or HUD-1A? I noticed that there is a signature line for the borrower on the HUD-1A, but none appears on the HUD-1.

A. Although the signature line appears on the HUD-1A, the borrower's signature is not required for either the HUD-1 or HUD-1A under the Real Estate Settlement Procedures Act. HUD's Regulation X, Appendix A, contains instructions for completing the HUD-1 and HUD-1A settlement statement along with a sample of the statement. Neither the HUD-1 or HUD-1A instructions refer to the borrower's signature. Section 3500.9, Regulation X, authorizes the settlement agent to add a signature line along with other modifications to the HUD-1. No reference in this section is made to the signature line in the sample for the HUD-1A. Thus, if you determine that the borrower's signature would be appropriate on the HUD-1 or HUD-1A, you may obtain it, but this is not required under Regulation X. However, you should be aware that borrowers' signatures are required for Federal Housing Administration loans.

KYC Dies 1-2-3. Now What?

Q. Since the long-awaited, then much-hated, know Your Customer proposed rules were killed in March, what will banks need to do to comply? -- A.B.,. Texas

A. According to ABA's Senior Counsel and Compliance Manager John J. Byrne, ABA recommended that the KYC proposal be withdrawn. Part of the reason for the industry position was that banks already have suspicious activity reports (SAR) and Bank Secrecy Act (BSA) reporting requirements and surveys show that 85-90% of all banks have policies in place dealing with this challenging area of compliance. Therefore, the government goal of effective fraud deterrence is already in place in our industry. …

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