Escrow & Title
What is the purpose of a Pennsylvania title company's 'closing protection letter' (CPL)?
AIt insures the physical security of the closing location
BIt provides lender protection against the settlement agent's fraud, theft, or failure to follow closing instructions✓ Correct
CIt guarantees the buyer's title will be clear of all liens
DIt confirms the title search has been completed
Explanation
A closing protection letter (CPL) is issued by the title underwriter to the lender (and sometimes the buyer/seller), protecting against loss arising from the settlement agent's fraud, theft, misappropriation of funds, or failure to follow the lender's written closing instructions. It is a common requirement by lenders in Pennsylvania closings.
Related Pennsylvania Escrow & Title Questions
- A title company in Pennsylvania that discovers an undisclosed lien after issuing a title insurance policy will typically:
- A Pennsylvania title company that issues a 'hold harmless' letter at closing agrees to:
- In Pennsylvania, what is a 'judgment lien' and how does it affect real property?
- Title insurance in Pennsylvania protects against:
- In Pennsylvania, what is the role of the 'settlement agent' at a real estate closing?
- A Pennsylvania home seller's existing mortgage balance at closing is $150,000 on a $275,000 sale. The closing costs total $20,000. What does the seller receive?
- In an escrow arrangement, the escrow agent's duties include:
- In Pennsylvania, the transfer tax is:
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →