What is the difference between the ALTA settlement statement and the Closing Disclosure?

The Closing Disclosure exists because of federal rules. It is delivered to the borrower at least three business days before consummation, it follows a fixed format, and certain charges are subject to tolerance limits measured against the Loan Estimate. Its audience is the borrower and the regulator.

The ALTA settlement statement exists because a closing has two sides and more parties than the borrower. It shows the seller's payoffs, the broker commissions, the transfer taxes, the adjustments for taxes and common charges, and the disbursements the settlement agent will actually make.

Reconciling them is a line-matching exercise. Every charge on the Closing Disclosure should appear on the ALTA statement at the same amount, and the difference in totals should be explainable by items that simply do not belong on a borrower's disclosure. Unexplained differences are worth resolving before anyone signs.

Timing is the practical constraint. Because the three business day delivery rule applies to the Closing Disclosure, a late change that requires redisclosure can move the closing date. Adjustments discovered the night before, like a corrected payoff or a missed water charge, are the usual culprits.

For the borrower the useful habit is to read the two side by side and ask about any line that appears on one and not the other. For the seller, the ALTA statement is the only document that shows the seller's numbers at all.