Whether the Closing Disclosure is prepared by the lender or settlement agent, it is prudent for the settlement agent to obtain a _____ affidavit signed by buyer and seller on a purchase/sale/finance transaction:

In a purchase, sale, or finance transaction, obtaining a source of funds affidavit signed by both the buyer and seller is crucial for several reasons. This affidavit aims to establish the legitimacy and legality of the funds being used in the transaction. It allows the settlement agent to confirm that the funds used for the purchase are not derived from illegal activities, thereby ensuring compliance with anti-money laundering regulations.

Additionally, this document helps protect the interests of all parties involved by reducing the risk of fraud in the financial transaction. By having both the buyer and seller attest to the source of their funds, the settlement agent can provide greater assurance to the lender and other stakeholders regarding the integrity of the transaction.

Other options like source of title pertain to the history and rightful ownership of the property, while non-identity and mechanics' lien affidavits relate to specific legal and construction-related issues that do not directly address the verification of funds. Therefore, the source of funds affidavit is the appropriate and prudent choice to assist in maintaining the legality and clarity of the transaction.