Escrow & Title
In Washington, a lender's 'closing protection letter' (CPL) is issued by a title insurance underwriter to:
AProtect the buyer from title defects
BProtect the lender against fraud or negligence by the closing agent on the lender's funds✓ Correct
CGuarantee the property's appraised value
DProtect the escrow officer from liability
Explanation
A Closing Protection Letter (CPL) is issued by the title insurance underwriter to protect the lender against losses caused by fraud or negligence by the approved closing agent (escrow/title company) in handling the lender's closing funds or documents.
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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.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
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.
Math Concepts
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