What is a 'Closing Protection Letter' (CPL) in a Delaware real estate transaction?
Why An indemnification agreement from the title insurance company to the lender (or buyer) protecting against loss due to the closing agent's fraud or dishonesty Is Correct
Answer B: An indemnification agreement from the title insurance company to the lender (or buyer) protecting against loss due to the closing agent's fraud or dishonesty
Exam Tip: Escrow & Title
Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.
Key Escrow & Title Terms in This Question
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Key Terms to Know
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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.
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