What is included in a closing protection letter?

What Is A Closing Protection Letter? A closing protection letter (sometimes “insured closing letter” or “CPL”) forms a contract between a title insurance underwriter and a lender, in which the underwriter agrees to indemnify the lender for actual losses caused by certain kinds of misconduct by the closing agent.

Who prepares the closing protection letter?

A CPL may only be issued provided that the closing agent/attorney and the policy issuing agent/attorney both write on the same underwriter. And of course it probably goes without saying, but only one CPL may be issued per transaction. One CPL benefits the buyer, the borrower, and the lender to the transaction.

What is a CPL fee?

A title insurance company may issue a closing protection letter free of charge, but this is not usually the case. How much they charge for a CPL is ultimately their decision, but the letter typically costs $25.

What is closing or settlement protection?

A Closing Protection Letter or CPL is offered before closing to protect lenders against unauthorized actions by settlement agents or failure to comply with the terms of the lender’s closing instructions.

What is a closing disclosure?

A Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).

Why is a closing protection letter necessary?

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.

What is a closing protection letter Illinois?

A Closing Protection Letter (CPL) is a form of insurance issued by title insurance companies, insuring the actions of a particular attorney, agent, and/or closer in conducting a closing. This insurance has been offered primarily to lenders in the past.

Who gets a copy of the closing disclosure?

By law, you must receive a copy of your Closing Disclosure three business days prior to closing. Contact your lender or closing agent (title company, escrow officer, or attorney) at least a week before closing to find out how you will receive your Closing Disclosure.

Are closing protection letters required in Illinois?

Closing protection letters are not required when the authorization for the title insurance agent to act as an escrow agent is given by an agency contract with the title insurance company pursuant to subsections (f), (g), and (h) of Section 16 of this Act, but shall be issued by the title insurance company upon the …

Does getting a closing disclosure mean Im approved?

Does receiving a Closing Disclosure mean the loan is approved? The loan is approved prior to a lender issuing a Closing Disclosure. However, you’ll want to make sure your credit, income and debt are in check during this timeframe until the transaction is finalized.

What happens after signing the closing disclosure?

After you sign the Closing Disclosure, no change is allowed in lender or broker fees, transfer taxes or other fees that you were not allowed to shop for. Don’t let anyone pressure you into rushing through the Closing Disclosure. You are well within your rights to take a breath and read and reread the documents.