The Difference Between ALTA & HUD in Real Estate Transactions
- RG
- Mar 27
- 2 min read
The home buying or selling process can be both an exciting and overwhelming process if you haven’t gone through it before. Throughout the closing process, you’ll be given many forms to review and sign so, it is important to understand what you are looking at. As you enter the final days of Escrow, your settlement agent at the Title Company will provide you with disclosures to review before closing. This is the time when all the numbers finally come together for both the buyers and the sellers. One of those real estate closing documents is known as an ALTA Settlement Statement or ALTA Statement in short.
New regulations put forth by The Consumer Financial Protection Bureau (CFPB), The Real Estate Settlement Procedures Act (RESPA), and specifically The Truth in Lending Act (TILA) created a set of similar documents to make the process easier for consumers to understand.
Is a HUD-1 the same thing as an ALTA settlement statement?
They are not exactly the same thing but serve the same purpose, which is to disclose all of the details of your purchase including charges and credits.
Over the years there have been lots of different names for the closing statements provided. The HUD was the primary disclosure provided until 2015 when the TILA-RESPA Integrated Disclosure came about. However, the TILA-RESPA form has personal information on it that can’t be provided to some parties in the transaction. Instead, an ALTA statement will be generated. The ALTA has the same numbers as the TILA-RESPA (which replaced the HUD), but without some of the personal info.
Here is a short timeline of the major events that dictate when each form was used.
1968 – TILA (Truth in Lending Act)
1974 – RESPA (Real Estate Settlement Procedures Act)
1986 – HUD-1 form (Housing and Urban Development Settlement Statement)
2010 – Dodd / Frank (The Dodd / Frank Wall Street Reform and Consumer Protection Act)
2015 – TRID (TILA-RESPA Integrated Closure Form – also called the TRID)
Reviewing the ALTA Settlement Statement ensures that all financial details are accurate. Any discrepancies or errors can be addressed before the closing, preventing post-closing complications. Buyers and sellers need a clear understanding of their financial obligations in the transaction. A careful review helps prevent last-minute surprises during the closing process.