I had 28 forms in my last refinance and 13 of them were what I call "I told you so," forms. These forms serve no other purpose than for the settlement/escrow service provider to be able to say, "I told you that you have the right to hire your own attorney to represent you in this transaction and here's the form you signed acknowledging that it says you agree that I gave you notice to hire your own attorney if you wanted to." Or something like that.

Is all this paperwork really necessary? Unfortunately, it is. I talked it over with the attorney conducting my latest settlement and it all came down to this – people aren't honest these days. If they were, a handshake would seal the deal.

So when you look at that mound of paper on the settlement or escrow table, here's some insight as to what it is you're about to dive into.

Settlement Statement Notice: The first notice I had to sign was that the settlement company had actually given me the HUD-1 Settlement Statement. The HUD-1 is a document published by the U.S. Department of Housing and Urban Development. It tabulates the funds flowing through the transaction, whether it's the sale of house or a refinance. (By the way, more than 21 percent of my $6,295.60 of closing costs were taxes.) You want to hang on to this form, by the way, come tax time for deductions of points paid.

Payoff Acknowledgement: This form lets me know that my bank has given the title and escrow company a "verbal and/or written confirmation of payoff figures." This form also notifies the seller/note holder that if the payoff amount given to them was inaccurate – meaning it was less than the actual amount – that the note holder (in this case, me) would pay the difference.

Privacy Policy: Now here's a "told you so" form that's worth keeping. This was a form I had not seen in a settlement before, or at least I didn't remember this from earlier purchases and refinances. I received two of these: one from the title company, the second from my new mortgage provider. They both told me from where they collected nonpublic personal information and what they intended to do with it.

Initial Escrow Account Disclosure Statement: Here's a pretty important form. This way you're not surprised about all the extras that are coming out of your pocket for taxes and insurance each month. It is out of the Escrow Account that the lender pays your local taxes and hazard insurance premiums.

Truth In Lending Disclosure Statement: This is from the lender and lays out before you the annual percentage rate (mine was 5.75 percent) the finance charges, the amount financed and the total payments you're gong to make over the term of the loan. Quickly go through this one or you may get buyers' remorse once you see that you may be paying as much in interest as you are for the value of the house.

FAQs to Truth in Lending Act: This has six questions and their answers about the above statement. Here's one of those forms that the government required lenders to put out there just so you know what it is you just signed.

Notice of No Oral Agreements: With this form, any oral agreements between the borrower and the lender are null and void.

Notice of Right to Receive A Copy of the Appraisal Report: It's what it sounds like – I have a right to the appraisal and the title company has told me so.

Servicing of Disclosure Statement: Have you ever gotten a loan through Acme Lending, then by your second payment you get a statement saying your loan has been sold to Triple Z Mortgage? That's what this statement tells you could happen. When you get this form, don't get too cozy with the lender, because he's about to be replaced.

Notice of Right to Cancel: Ahhh, the Buyers Remorse form, at least that's what I call it. You have a right to cancel your loan "within three (3) business days" from whichever of the following events occurs last: 1) the date of the transaction; 2) the date you received your Truth in Lending Disclosures; or 3) the date you received this Notice of Right to Cancel.

These are but a few of the forms you may find in your mortgage file. If you end up using a government-insured loan (FHA, VA, etc.) your file full of various disclosure and statement forms will be even thicker. Happy reading and signing.

Published: December 27, 2002

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