Get Closing Protection Letter

Buyers usually shoulder the cost of a title insurance policy in Texas. However, who pays for it can be negotiated as part and parcel of any real estate sale agreement.

The Company is not liable for a loss if the written notice is not received within two years from the date of the closing.

Closing Protection Letter (CPL). What is it and why do they want one? A Closing Protection Letter is added protection for the Insured Party (usually the lender/buyer) against actual loss of funds incurred within a specific transaction due to misconduct by the closing agent.

A CPL is intended to indemnify the person who purchases it from the title insurance agent's: (1) theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing, or escrow funds; and (2) failure to comply with any applicable written closing instructions, when agreed to by the title ...

In a Closing Protection Letter, your underwriter agrees to reimburse the addressee if your title agency is guilty of fraud or dishonesty in handling the closing money or documents, which courts have said covers more than just theft of the loan money, or if you fail to follow certain written closing instructions.

Under Texas Insurance Code §2702.002, only real property transactions in excess of $500,000.00 are eligible for insured closing service protection for the purchaser/seller.

A Closing Protection Letter, commonly called a CPL (or in some states an Insured Closing Letter “ICL”), is an agreement from a title insurance company designed to protect the lender against issues that might arise from non-compliance with lender written closing instructions, fraud or negligence on the part of the ...