Closings glossary
Closing protection letter
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.
What is a closing protection letter?
Quick Answer
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.
Where does closing protection letter come up in a New York City closing?
A lender on a Manhattan condo purchase will not wire funds until the closing protection letter naming that lender and the correct agent is in the file.
What else should you read before closing?
In the glossary
- 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 th...
- Wire fraudA fraud in which spoofed or compromised email redirects closing funds. Verifying instructions by phone at a number obtained independently is the st...
- Wire instructionsThe bank routing and account details used to send closing funds. Independent phone verification, not the contact details in the email itself, is wh...
- 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 u...
- Title insuranceInsurance against loss from title defects that existed before the policy date. New York premiums come from a filed rate schedule, so the figure is ...
Questions this raises
- What is a closing protection letter?A CPL indemnifies the lender if the settlement agent mishandles funds or ignores closing instructions. What borrowers should know about it in New Y...
- How do I avoid wire fraud at a closing?Closing wire fraud starts with a spoofed email changing account details. Verify by phone at a known number, confirm digits, and act fast if funds a...
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