Closing Protection Letters

Closing Protection Letters (CPLs) are agreements provided by financial institutions or title insurers that protect lenders and other parties involved in a real estate transaction from potential financial losses caused by the title or closing process. Essentially, they assure that if issues arise unexpectedly—such as fraud or errors—they will cover the costs, safeguarding the parties' investments. CPLs are a form of risk management, offering reassurance that the closing process will be completed properly and that any covered problems will be financially addressed, ensuring confidence and security for everyone involved in the transaction.