Closing protection letter

The full definition

An underwriter's letter covering a lender or buyer against defined misconduct or error by the settlement agent handling the closing funds and documents for a transaction.

Also called: CPL, Insured closing letter.

Which related terms should you know?

These are the terms that come up alongside closing protection letter in the same file.

Underwriter (title)

The insurer whose policy is issued on a transaction. An agency prepares and issues on the underwriter's forms, and claims are ultimately paid by the underwriter.

Wire fraud

A fraud in which spoofed or compromised email redirects closing funds. Verifying instructions by phone at a number obtained independently is the standard defense.

Wire instructions

The bank routing and account details used to send closing funds. Independent phone verification, not the contact details in the email itself, is what confirms them.

Escrow (at closing)

Funds or documents held by a neutral party until stated conditions are satisfied. At a New York closing it usually means a holdback from proceeds under a written escrow agreement.

Title insurance

Insurance against loss from title defects that existed before the policy date. New York premiums come from a filed rate schedule, so the figure is calculated rather than negotiated.

What else should you read before closing?