Escrow Thursday: Closing Protection Letter

Closing Protection Letter (CPL)
This is a document issued by title insurance underwriters that indemnifies a third party, generally a lender, as to one of its policy-issuing agent’s escrow practices. In other words, title companies insure the title to the house you want to buy, but this letter also extends certain assurances as to an agent’s behavior in closing real estate transactions.
Who Requires One? Some national and local mortgage lenders.
When is it Required? The lender requires the CPL before they will wire loan funds to Escrow. In some cases the lender will only know that the CPL is required in the final underwriting stage which is quite often disclosed on or near the closing date.
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