Escrow & Title
A title company's 'insured closing letter' (or closing protection letter) provides:
AA guarantee that the property has no defects
BProtection to the lender against the title company's negligence or dishonesty in handling closing funds and documents✓ Correct
CTitle insurance coverage for the buyer
DProof that the closing complied with RESPA
Explanation
An insured closing letter (closing protection letter) protects the lender against losses caused by the title company's agent's failure to follow the lender's closing instructions or misappropriation of closing funds.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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