closing protection letter


Also found in: Acronyms.

closing protection letter

Additional title insurance coverage insuring the lender against losses caused by errors or infidelity of the closing attorney or the closing agents in the handling of the transaction.

References in periodicals archive ?
Proof of out-of-pocket Joss--if the agent fails to procure one closing protection letter (CPU is not expired form of government considered insurance (as it isn't in identification from each several states), it may be considered an borrower at the closing indemnity contract, very much limiting table.
A majority of courts have held that if a title insurance company has not issued a closing protection letter, the title insurer has no liability for fraud or other misconduct by a settlement agent in connection with the closing.
The defendant, a residential mortgage lender brought an action against the title insurer for indemnification under a closing protection letter for losses caused by an alleged sham sale to a straw buyer at an inflated price.
Under the closing protection letter, Lawyers Title agreed:
190) While the closing protection letter "indemnified New Freedom against the issuing agent's '[f]raud or dishonesty'," the trial court interpreted "fraud" to mean actual rather than constructive fraud, given the fact that the contract did not simply allow for rescission, but instead required Lawyers Title to pay damages to New Freedom in an amount representing New Freedom's actual losses resulting (191) from the issuing agent's conduct.