Glossary term
ALTA Settlement Statement
An ALTA settlement statement is a standardized closing document used by title and settlement companies to itemize buyer and seller charges and credits.
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What Is an ALTA Settlement Statement?
An ALTA settlement statement is a standardized closing document developed by the American Land Title Association for title insurance and settlement companies. It itemizes charges, credits, prorations, payoffs, deposits, and funds due from or payable to the buyer and seller in a real estate transaction.
The ALTA statement is not the same as the federal Closing Disclosure. ALTA states that its settlement statement is not meant to replace the CFPB Closing Disclosure that applies to most consumer mortgage loans.
Key Takeaways
- An ALTA settlement statement itemizes closing charges and credits.
- It is commonly used by title and settlement companies.
- Separate versions may exist for buyer, seller, combined, and cash transactions.
- For most mortgage loans applied for after October 3, 2015, borrowers receive a Closing Disclosure instead of a HUD-1.
- Buyers and sellers should compare the ALTA statement with the Closing Disclosure, purchase contract, payoff figures, and escrow instructions.
What It Shows
An ALTA statement can show purchase price, earnest money, lender funds, title charges, recording fees, transfer taxes, prorated property taxes, HOA dues, commissions, seller credits, loan payoffs, insurance charges, and cash to close. The exact layout depends on the version used and the transaction.
For sellers, the statement helps explain net proceeds. For buyers, it helps reconcile funds needed at closing. For title and settlement companies, it organizes the money movement needed to close and disburse.
ALTA Statement Versus Closing Disclosure
The Closing Disclosure is the federal mortgage disclosure form for many consumer mortgage loans. It is designed around the loan, APR, payments, loan costs, other costs, cash to close, and regulatory disclosure requirements. The ALTA statement is a settlement-company document that may present the transaction from a closing and disbursement perspective.
In practice, both can be useful. The Closing Disclosure helps borrowers understand the mortgage. The ALTA statement can help both sides see how all closing funds move through settlement.
Why Buyers and Sellers Review It
Small errors can affect cash to close or seller proceeds. A missed credit, wrong commission, incorrect tax proration, outdated payoff, duplicate fee, or wrong deposit can change the final amount due. Reviewing the statement before signing gives parties time to resolve errors.
The statement is also useful after closing for tax records, basis calculations, reimbursement disputes, and proof of transaction costs.
What to Compare
Compare the ALTA statement with the purchase agreement, lender Closing Disclosure, title commitment, payoff letters, repair credits, inspection credits, escrow instructions, and wire instructions. Wire details should be verified through trusted channels because real estate closings are frequent targets for wire fraud.
If numbers do not match, ask the settlement agent, lender, or real estate professional to explain the difference before closing.
The Bottom Line
An ALTA settlement statement is a closing-money map. It does not replace required federal mortgage disclosures, but it helps buyers, sellers, and settlement agents understand the charges, credits, and funds that make the real estate closing work.