Credits have always been a challenging item on Page 1 of the HUD. The reason for this is that on page 1 you have items that are disbursements, ie payoffs and payments, items that are adjustments, ie pro-rations, items that are retained, ie deposits being held by third parties, and finally credits which could be retained or double sided adjustments. From a programming standpoint it is impossible to tell at face value how a single sided credit is being accounted for when funding and disbursing a file. For this reason, several years ago, we introduced the credits screen under the Escrow Acc. menu from within a file. Our trainers discuss the benefits of this screen during training and employ multiple scare tactics to discourage the manual entry of credits on the settlement statements but very few actually use this screen. With the Closing Disclosure you will want to get in the habit of using this screen for any credits appearing on page 3, especially credits from the Seller to the Buyer. The reason I emphasize the credits from the seller to the buyer is that on the top of Page 3 there is the "Calculating Cash to Close" table and it breaks out the seller credits. The only way for the system to know which "adjustments" on page 3 are actually credits from the seller to buyer and include them properly in this table is to enter them in the Credits screen.
For Florida files the system will automatically calculate the Title Premium Adjustment credit from the seller to the buyer to account for the improper disclosure of title premiums in that state.
And now for the ultimate scare tactic. Failure to disclose the credits in this fashion will result in non-compliance with the CFPB final rule and could result in fines of up to $1,000,000/day. Now that's a lot of zeroes. I'm just kidding by the way, I don't think you will get fined for entering credits manually on our Closing Disclosure but using the Credit screen will certainly make your life a lot easier and allow the system to handle the nuances of the final rule.