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. The CPL explains the requirements for qualifying, the conditions that must be met, and what situations are excluded from coverage.
- The closing agent fails to follow the written closing instructions provided by the parties.
- The closing agent fails to disburse the transaction funds in accordance with the parties’ written
- Coverage on a CPL is usually dependent upon a title insurance policy being issued.
- CPLs are transaction specific.
- There is a charge for a CPL. Each Underwriter sets their own fees.
- There is no additional charge for amending/updating an existing CPL.
- There is no additional charge for changes in Lender.
- If the transaction cancels, there is no charge for the CPL.